CZ Fires Back at OKX CEO: October 10 Crypto Crash Was “Macro Chaos,” Not Binance’s Fault
OKX CEO Accuses Binance Yield Campaigns of Triggering October 10 Crypto Market Crash
The cryptocurrency industry is once again locked in a public blame game following the dramatic market collapse of October 10, an event many analysts describe as the most severe single-day wipeout in the history of digital assets. At the center of the controversy are two of the world’s largest exchanges, OKX and Binance, whose senior leadership now offers sharply conflicting explanations for what went wrong.
Star Xu, the founder and chief executive of OKX, has directly accused Binance and its founder Changpeng Zhao, widely known as CZ, of fueling excessive risk-taking through aggressive yield campaigns. According to Xu, these campaigns created dangerous leverage structures that ultimately collapsed when market conditions deteriorated.
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| Source: X(formerly Twitter) |
Binance has rejected the accusation outright. Zhao has dismissed the claims as speculative and misleading, arguing that the October 10 crash was driven by global macroeconomic shocks rather than the actions of any single exchange. The dispute has exposed deeper divisions within the crypto industry over risk management, transparency, and the role of centralized platforms in shaping market behavior.
A Crash That Shook the Entire Market
The October 10 sell-off erased an estimated $19 billion in value across major cryptocurrencies within hours. Prices plunged simultaneously across multiple exchanges, triggering cascading liquidations and wiping out heavily leveraged traders. Bitcoin, Ethereum, and a range of smaller tokens experienced rapid declines that overwhelmed risk controls and left many retail investors with little chance to react.
For market participants, the scale and speed of the collapse raised urgent questions about systemic vulnerabilities. While crypto markets have endured sharp downturns before, few events have matched the intensity of the October 10 crash, which unfolded faster than many automated safeguards could respond.
The USDe Controversy
Central to OKX’s criticism is a token known as USDe. According to Xu, Binance effectively treated USDe as a low-risk, stable asset, despite its underlying structure carrying significantly higher risk than traditional stablecoins backed by cash or short-term government securities.
Xu claims that Binance’s marketing campaigns encouraged users to view USDe as a safe yield-generating product. This perception, he argues, enabled what he describes as a “leverage loop,” in which traders borrowed funds to purchase USDe, then used that same token as collateral to borrow even more capital.
When prices began to slide, the leveraged structure unraveled quickly. As collateral values dropped, forced liquidations accelerated the decline, creating a feedback loop that magnified losses across the market. Xu contends that the resulting collapse was not an isolated incident, but a predictable outcome of excessive leverage promoted through yield-driven incentives.
In public statements, Xu has characterized these strategies as “short-term yield games” that undermined the industry’s long-term credibility. He argues that even a relatively modest market shock was enough to trigger a chain reaction because the system had become structurally fragile.
Binance Pushes Back
Binance has offered a starkly different explanation. In a detailed response circulated through official channels and reported by HOKANEWS, the exchange argued that the October 10 crash was driven by a convergence of macroeconomic and technical factors that affected the entire financial system, not just crypto.
Among the key factors cited by Binance was a sudden escalation in global trade tensions. A surprise announcement of a 100 percent tariff increase by the United States sent shockwaves through traditional markets, prompting risk-off behavior across equities, commodities, and digital assets simultaneously.
Binance also pointed to congestion on the Ethereum network. As transaction volumes surged, network delays reportedly prevented market makers from moving liquidity quickly enough to stabilize prices. This bottleneck, according to Binance, contributed to sharp price gaps and intensified volatility.
Additionally, Binance noted that global liquidity dried up as order books thinned across multiple exchanges. With fewer buyers willing to step in, prices fell rapidly, regardless of platform-specific policies. Zhao has emphasized that most liquidations occurred before Binance experienced any technical issues, reinforcing his claim that the crash was systemic rather than operational.
Competing Narratives, Broader Implications
The disagreement between OKX and Binance reflects a broader struggle within the crypto industry to define accountability in an increasingly interconnected market. As exchanges expand their product offerings, including yield programs and complex derivatives, questions about responsibility for systemic risk have become more pressing.
Critics argue that centralized platforms wield enormous influence over market behavior and must exercise greater caution when promoting high-yield products. Supporters counter that traders willingly accept risk and that market downturns are an unavoidable aspect of speculative assets.
What makes the October 10 crash particularly significant is the scale of leverage involved. Analysts say that years of low interest rates and aggressive marketing have normalized high-risk strategies, leaving markets vulnerable to sudden reversals when external conditions change.
Regulatory Scrutiny Intensifies
The fallout from the crash is likely to draw increased attention from regulators already concerned about investor protection and market stability. Lawmakers in several jurisdictions have called for closer examination of yield products, collateral standards, and disclosure practices at major exchanges.
While no formal enforcement actions have been announced, industry observers expect regulators to scrutinize how certain tokens are classified and marketed. The debate over USDe, in particular, could influence future rules governing stablecoin-like assets that do not fit traditional definitions.
For exchanges, the episode underscores the challenge of balancing innovation with risk control. Yield programs have been a powerful tool for attracting users, but they also introduce complex dependencies that can amplify losses during periods of stress.
Market Reaction and Recovery
In the weeks following the crash, markets have shown tentative signs of stabilization. Volatility remains elevated, but prices have recovered some of their losses as leveraged positions have been flushed out of the system.
Many analysts view the downturn as a painful but necessary reset. By forcing the liquidation of excessive leverage, the crash may have reduced systemic risk in the near term. At the same time, the reputational damage to the industry is difficult to ignore, particularly among retail investors who suffered significant losses.
What Comes Next for the Crypto Industry
Experts say the October 10 collapse could mark a turning point in how risk is managed and communicated within the crypto ecosystem. There is growing consensus that exchanges will need to be more transparent about the potential downsides of yield products and the conditions under which they can fail.
Some industry leaders have called for a shift toward what they describe as “proof of risk,” emphasizing clear disclosures and stress testing over headline-grabbing returns. Whether this approach gains traction remains to be seen, especially in a market where competition for users is fierce.
As the public dispute between OKX and Binance continues, the broader lesson may be less about assigning blame and more about understanding the structural vulnerabilities that allowed the crash to unfold. For now, the industry faces the challenge of rebuilding trust while adapting to a more cautious and scrutinized environment.
A Costly Lesson
The October 10 crypto crash will likely be remembered as one of the defining moments of the current market cycle. It exposed the risks of leverage, the interconnected nature of digital asset markets, and the consequences of aggressive growth strategies.
While opinions differ on who bears responsibility, there is little disagreement about the scale of the damage. For traders, exchanges, and regulators alike, the event serves as a stark reminder that rapid innovation without adequate safeguards can come at a high cost.
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