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A public dispute has erupted between the leaders of two of the world’s largest cryptocurrency exchanges, with OKX CEO Star Xu accusing Binance of “irresponsible marketing” that allegedly triggered the massive market crash on October 10 last year.
The downturn, now referred to in industry circles as the “10/10 crash,” saw Bitcoin plummet below $80,000 and wiped out approximately $20 billion in liquidations across the market.
The Accusation: ‘Manufactured Risk’
In a detailed statement issued on January 31, Xu argued that the crash was not an organic market correction but a “manufactured risk” caused by Binance’s integration of USDe, a synthetic dollar protocol by Ethena.
According to Xu, Binance launched a campaign in late September offering a 12% APY on USDe with no caps, while treating the token as equivalent to stablecoins like USDT and USDC for collateral purposes.
“Users were encouraged to leverage loop: USDT/USDC → USDe → borrow USDT → buy more USDe → repeat,” Xu explained. He noted that this cycle produced artificial yields as high as 70%, which obscured the asset’s true risk profile behind Binance’s reputation.
Xu emphasized that USDe is a “tokenized hedge fund product” backed by delta-neutral strategies, distinct from standard stablecoins, and therefore carries significantly higher structural risks.
The 10/10 Flash Crash Mechanism
The OKX chief detailed how a large institutional liquidation on Binance during a period of macro volatility caused USDe to briefly depeg on the platform, dropping to $0.60-$0.66.
While USDe reportedly maintained its peg on other exchanges, the price disparity on Binance triggered cascading liquidations.
“The depeg was exchange-specific… ~$20B wiped out in chain reactions,” the report stated, adding that other assets like wBETH and BNSOL also malfunctioned during the chaos.
CZ and Binance Respond
Binance founder Changpeng Zhao (CZ) dismissed the allegations that was earlier mentioned by ARK’s Cathie Wood in an interview. CZ begun characterizing the narrative as “FUD” (Fear, Uncertainty, and Doubt).
“FUD doesn’t hurt the target… FUD hurts the market (ie everyone),” CZ stated in a post on X. He maintained that the volatility was driven by external macro factors and trade tensions rather than internal systemic failures.
The dispute also involved venture capital firm Dragonfly. After Dragonfly Managing Partner Haseeb Qureshi defended Binance by suggesting the crash timeline did not match Xu’s narrative, CZ posted that “Dragonfly is/was one of the largest investors of okx”.
Xu refuted this claim, clarifying: “Dragonfly has never been an investor in OKX… In fact, OKX invested in Dragonfly”.
Fallout and Unfollows
The conflict extended to social media interactions. Reports indicate that CZ unfollowed Anatoly Yakovenko (Toly), the co-founder of Solana, after Yakovenko reposted Xu’s thread regarding the crash.
On February 1, Xu stated he would no longer engage in the debate to avoid circular arguments.
“I don’t like debate—because you can never wake someone who is pretending to sleep,” Xu wrote. “The facts are clear”.
Following the market turmoil, Binance announced a $1 billion conversion to Bitcoin to help stabilize the markets.
This article is published on BitPinas: Binance, OKX Chiefs Clash Over $20B ‘10/10’ Market Crash; CZ Dismisses Claims as ‘FUD’
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