OKX CEO Claims Binance’s Mistake is Behind the Market Downturn! Here Are His Statements

OKX CEO and founder Star Xu argued that a high-yield campaign launched on Binance was behind the sharp drop in the cryptocurrency market on October 10th. Xu stated that the collapse was “not a complicated accident, but the result of irresponsible marketing practices.”

Star Xu stated that tens of billions of dollars in liquidations occurred on October 10th, and that the micro-structure of the crypto market has fundamentally changed since then. He added that many participants in the sector believe the damage is even more severe than that of the FTX crash.

According to Xu, the root of the problem lies in a temporary user acquisition campaign launched by Binance.

According to Star Xu’s assessment, Binance launched a temporary campaign offering a 12% APY (Average Payout) for USDe. USDe was allowed to be used with the same collateral status as USDT and USDC, and without effective limits. Users were incentivized to convert their USDT and USDC assets to USDe to achieve high returns.

Xu argued that USDe is structurally different from classic stablecoins. He stated that the model behind USDe is a tokenized “hedge fund product” run by Ethereum and based on arbitrage and algorithmic strategies.

In contrast, he argued that tokenized money market funds such as BlackRock’s BUIDL or Franklin Templeton’s BENJI fund have a low-risk structure, while USDe carries “hedge fund-level risk.”

According to Xu, the risk increased as users repeated the following cycle:

USDT/USDC tokens were converted to USDe. USDT was borrowed using USDe as collateral. The borrowed USDT was converted back to USDe, and the cycle repeated.

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This mechanism artificially created APY (Average Payout) rates of 24%, 36%, and even over 70%. Xu argued that because these returns were offered by a large platform, they were perceived as “low-risk,” but systemic risk accumulated rapidly.

Xu stated that USDe quickly lost its stablecoin (depeg) when market volatility increased, triggering chain liquidations, and that weaknesses in risk management in assets like WETH and BNSOL deepened the collapse. He claimed that some tokens traded at near-zero prices for a short period.

Star Xu stated that her statement was not an attack on Binance, but rather a clear discussion of systemic risks. However, she added that Binance, as one of the largest global platforms, carries greater responsibility due to its weight in the industry.

According to Xu, long-term trust in the crypto sector cannot be built on short-term high-return games, excessive leverage, and marketing practices that lack sufficient transparency regarding risks.

The CEO of OKX stated that he expects misinformation and coordinated FUD campaigns targeting OKX in the coming period, but that they will continue to speak out about systemic risks despite this.

*This is not investment advice.

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