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OKX CEO Star Shaw accused Binance of fueling the October 10 crisis that wiped nearly $19 billion from cryptocurrency markets.
Xu claims that the turmoil was caused by Binance’s aggressive marketing of the synthetic dollar Athena USD.
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OKX CEO criticizes Binance’s “irresponsible” USDe marketing
In a post dated January 31
“No complications. No accidents. 10/10 was due to irresponsible marketing campaigns by some companies,” he said.
Xu claimed that Binance users’ purchases of the synthetic dollar USDe encouraged excessive leverage. He argued that this created a systemic fragility that collapsed under market pressure.
According to the CEO of OKX, Binance offers an annual return of 12% on the US dollar (USDe). This allowed users to collateralize assets on similar terms To that of traditional stablecoins like USDT and USDC.
Xu argued that this created a “leverage loop” where traders convert standard stablecoins into US dollars to collect agricultural yield. He claimed that this activity artificially increased the perceived annual interest rate of the token to rates of up to 70%.
“This campaign allowed users to use USDe as collateral with the same treatment as USDT and USDC with no effective limits,” Xu wrote.
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Unlike traditional stablecoins backed by cash equivalents, USDe uses a delta-neutral hedging strategy that Xu described as carrying “hedge fund-level structural risk.”
by the time The fluctuations occurred on October 10Shaw confirmed that this influence was violently dismantled. The decline in the value of the US dollar led to a series of liquidations that risk drivers could not contain, especially affecting assets such as WETH and BNSOL.
According to him, some tokens briefly traded at almost zero levels, and the “artificial” stability of USDe hid the accumulation of systemic risks until it was too late.
“As the largest global exchange, Binance has significant influence – and corresponding responsibility – as an industry leader. Long-term trust in cryptocurrencies cannot be built on short-term return games, excessive leverage, or trading practices that hide risks,” Xu concluded.
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Binance and Athena refute the OKX theory
However, senior industry players strongly rejected Xu’s account, citing transaction data that contradicted his timeline.
Haseeb Qureshi, managing partner of Dragonfly, argued that Shaw’s theory does not take into account the order of events. According to Qureshi, the price of Bitcoin reached its lowest level 30 minutes earlier The US dollar deviates from its fixation on Binance.
“It is clear that USDe could not have caused the chain of liquidations,” said Qureshi, describing the accusations as a mistake in cause and effect.
He also said that The price of the USDe It was an isolated event in the Binance order book, while the liquidation spiral was in the market.
“If the US dollar’s ‘withdrawal’ had not spread to the market, it is inexplicable how every exchange saw huge losses,” Qureshi added.
Athena Labs founder Jay Young also disputed Xu’s claims. He cited order book data proving that the divergence in US dollar prices occurred only after the broader market had already collapsed.
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At the same time, Binance emphasized that the problem stems from a “liquidity vacuum” and not from its product offerings.
The stock market has published data indicating that Liquidity of Bitcoin It was “zero or close to zero” in most key positions during the collapse. This weak market created a scenario in which mechanical selling drove prices up disproportionately.
The exchange also denied systematic manipulation, attributing the price chaos to market makers withdrawing inventory in response to extreme volatility and API latency.
However, this conflict highlights The blame game is on the rise among the biggest cryptocurrency exchanges While it faces continued scrutiny on the structural fragility exposed during the October 10 incident.
