The cryptocurrency market experienced a significant crash on October 10, sparking controversy and a public dispute between OKX and Binance. OKX CEO Star has accused Binance of creating conditions that led to the market”s downfall due to its promotion of USDe, a synthetic dollar offering a 12% annual percentage yield. Star argues that this marketing blurred the lines between stablecoins and hedge funds, contributing to a dangerous leverage cycle in the market.
According to Star, the promotional campaign encouraged users to borrow USDT against USDe collateral repeatedly, creating leverage loops that ultimately destabilized the market. On the day of the crash, tens of billions of dollars were liquidated as traders rushed to exit their positions when USDe lost its peg. Star emphasized that the promotional activities lacked proper risk disclosure, which he believes is critical for user safety.
In a counter-argument, venture capitalist Haseeb Qureshi dismissed Star”s claims as unfounded and politically motivated. He pointed out that Bitcoin had already reached its bottom approximately 30 minutes before the significant movements in USDe occurred on Binance, suggesting that the causation narrative proposed by Star does not hold up under scrutiny. Qureshi”s observations imply that the timing of the events contradicts the narrative that pins the blame solely on Binance”s actions.
Qureshi also questioned the motives behind Star”s accusations, noting that the order book data and trading records had been publicly accessible for months. The timing of these claims raises questions about their intent, particularly given that many analysts had already conducted detailed examinations of the crash shortly after it occurred.
The market turmoil on October 10 was exacerbated by external factors, including new tariff threats announced by President Trump, which occurred when traditional markets were closed. This led to heightened selling pressure in the cryptocurrency market as traders sought to mitigate risk. Additionally, technical failures such as outages of Binance”s application programming interfaces during peak trading times created further chaos in market conditions.
As the cryptocurrency sector continues to evolve, the events surrounding the October 10 crash serve as a critical lesson on the implications of marketing strategies and the inherent risks associated with synthetic assets. The fallout from this incident highlights the need for transparency and risk management in the rapidly changing landscape of digital currencies.
