Early bitcoin investor Star Xu, founder of OKX, blames Binance for BTC's October crash

Star Xu, founder of the crypto exchange OKX, publicly blamed Binance for the massive Bitcoin flash crash on October 10th, arguing it was caused by irresponsible yield campaigns rather than market plumbing issues or simple accidents. Xu specifically pointed to Ethena's yield-bearing token, USDe, which he described as closer to a tokenized hedge fund strategy than a stablecoin. He alleged that Binance encouraged users to swap stablecoins for USDe to earn high yields, then use that USDe as collateral to borrow more stablecoins, creating a self-feeding leverage loop that amplified liquidations when volatility hit.

Conversely, Dragonfly partner Haseeb Qureshi dismissed Xu's narrative as "ridiculous," arguing that if the USDe depeg was the root cause, the stress would have propagated across all exchanges simultaneously. Qureshi noted that the USDe price divergence only occurred on Binance, yet the liquidation spiral happened everywhere, suggesting a broader, macro-driven selloff hitting an already leveraged market was the true trigger.

Binance itself previously attributed the crash to a macro selloff colliding with heavy leverage and vanishing liquidity, rejecting claims of a core system failure. Xu maintained that the structural leverage created by the USDe loop was the primary factor that turned a market shock into a catastrophic wipeout.

(Source：CoinDesk)