The October cryptocurrency market crash, which saw significant losses across various digital assets, has been attributed to the marketing practices of Binance, according to Star Xu, the CEO of OKX. In a recent statement, Xu emphasized that the events leading to this downturn were not complex nor accidental, asserting that irresponsible marketing campaigns by major players in the industry played a crucial role.
On October 10, a staggering amount of over $19 billion was liquidated in crypto positions. Xu highlighted that Binance”s influence as the largest global exchange comes with a corresponding responsibility. He pointed to Binance”s promotion of a stablecoin yield offering, which he deemed to have “hedge-fund-level risk,” as a catalyst for the market”s turmoil.
In September, Binance launched a campaign allowing users to earn a 12% annual percentage rate (APR) on the USDe stablecoin, which could be used as collateral. Xu criticized this offering, suggesting that it encouraged traders to engage in risky behaviors without fully understanding the implications. He noted that this led many into a “leverage loop,” making them vulnerable to market fluctuations.
Following tariff threats from U.S. President Donald Trump, the market experienced severe shocks, with cryptocurrencies, including Bitcoin, Ethereum, and Solana, suffering double-digit declines. Xu argued that even minor market disturbances were enough to trigger a cascading effect of liquidations, particularly after USDe quickly depegged during heightened volatility.
The October crash marked the most significant liquidation event in cryptocurrency history, with altcoins plummeting by as much as 80% in a single day. This event left many traders reeling, as the market has struggled to regain its footing since then. Currently, Bitcoin is trading well below its previous all-time highs, remaining under the $100,000 mark.
In response to the backlash, Binance co-founder and former CEO Changpeng Zhao refrained from further commentary on the accusations but shared posts that dismissed Xu”s claims. After the crisis, Binance took steps to compensate traders affected by pricing errors and other disruptions, offering hundreds of millions of dollars in relief.
As the cryptocurrency market continues to navigate repercussions from this unprecedented crash, industry leaders are reflecting on the responsibilities that come with their platforms and the far-reaching impacts of their marketing strategies.
