A dormant conflict between crypto’s largest exchanges erupted into open warfare this weekend as OKX CEO Star Xu publicly accused Binance of engineering the catastrophic “10/10” market crash. The October 10, 2025 event, now infamous as crypto’s “Black Friday,” wiped out $19.1 billion in leveraged positions and forced Bitcoin down 30% in hours.
The Accusation: A “Leverage Loop”
In a scathing post on X, Xu alleged the crash was not a market accident but the mathematical result of an “irresponsible marketing campaign” by Binance. The specific vector: Ethena’s USDe.
Xu claims Binance aggressively promoted a 12% APY on USDe while allowing users to collateralize the synthetic dollar with zero fees. This created a recursive “leverage loop” where traders converted USDT to USDe, used it as collateral to borrow more USDT, and repeated the cycle. When USDe briefly depegged to $0.65 on Binance’s internal order book during the October volatility, the loop snapped.
“No complexity. No accident. 10/10 was caused by irresponsible marketing campaigns by certain companies,” Xu wrote, noting the damage exceeded the 2022 FTX collapse.
Binance Defends: Macro, Not Micro
Binance immediately released a detailed post-mortem rejecting the liability. The exchange attributes the $19 billion wipeout to a “macroeconomic perfect storm,” specifically citing the surprise announcement of 100% tariffs on Chinese goods by former President Donald Trump and a sudden spike in 10-year Treasury yields.
Binance admitted to technical “performance degradation” between 21:18 and 21:51 UTC on the day of the crash but argues that 75% of liquidations had already occurred before their systems stuttered. The exchange has since paid out hundreds of millions in compensation to affected users.
The “Far-Fetched” Defense
Changpeng “CZ” Zhao, speaking during a rare AMA, dismissed Xu’s narrative as “far-fetched.” While Zhao stepped down as CEO in 2023, his voice remains the de facto authority for the exchange’s defense. He emphasized that Binance is “monitored and regulated” by U.S. and Abu Dhabi authorities, framing the accusation as a competitor leveraging a tragedy for market share.
The market remains scarred. Bitcoin, which touched $126,000 before the crash, struggles to hold the $115,000 support line as institutional open interest remains at multi-year lows. The public spat suggests that while the liquidations have settled, the regulatory and reputational fallout of “10/10” is just beginning.
