OKX CEO Links October Crypto Crash To High-Risk Yield Practices On Binance
The global crypto market continues to unpack the remark reason in the support of the violent promote-off that rocked digital sources in mid-October, wiping out tens of billions of bucks in liquidations within hours.
Now, OKX CEO Enormous title Xu is openly pointing to what he describes as a unhealthy leverage cycle enabled by Binance, one who quietly reworked a yield product accurate into a systemic risk engine.
In an intensive public assertion shared on X, Enormous title Xu argued that the October 11 fracture modified into as soon as now now not a random volatility event but the outcomes of structural failures created by how USDe modified into as soon as promoted, handled, and over and over leveraged across the market. His feedback, that will be found, are snappy reshaping exchange conversations around risk management and exchange responsibility.
No complexity. No accident.
10/10 modified into as soon as precipitated by irresponsible marketing and marketing campaigns by sure corporations.On October 10, tens of billions of bucks were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure basically modified after that day.… pic.twitter.com/N1VlY4F7rt
— Enormous title (@star_okx) January 31, 2026
In line with Xu, the fallout has already altered the microstructure of crypto procuring and selling itself.
“On October 10, tens of billions of bucks were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure basically modified after that day,” he acknowledged.
Many market contributors now assume the wreck surpassed even the give contrivance of FTX, a sing that underscores excellent how deeply the shockwaves traveled.
Binance’s USDe Yield Marketing and marketing campaign Sparked A Excessive-Danger Leverage Loop
On the center of Xu’s criticism is a brief user-acquisition campaign launched by Binance that equipped an peep-catching 12% APY on USDe holdings.
While excessive yields are nothing fresh in crypto, the snarl, in line with Xu, modified into as soon as how Binance allowed USDe to purpose virtually identically to outdated-customary stablecoins be pleased USDT and USDC, collectively with being extinct as collateral and not using a meaningful restrictions.
This effectively positioned USDe as a “safe” asset in traders’ eyes, despite carrying a worthy higher embedded risk profile.
Users were inspired to remodel their USDT and USDC into USDe to dash returns, on the full with out sure verbal exchange referring to the underlying publicity they were taking on.
From the surface, it looked be pleased a easy yield different.
Beneath the hood, it modified into as soon as something a ways extra unhealthy.
USDe Operates Devour A Tokenized Hedge Fund, No longer A Stablecoin
Enormous title Xu emphasized that USDe is basically diversified from long-established stablecoins or low-risk tokenized funds.
USDe is issued by Ethena, which raises capital thru what it markets as a “stablecoin,” then deploys these funds into index arbitrage and algorithmic procuring and selling strategies, if truth be told running hedge-fund-style operations and tokenizing the ensuing positions.
The token can then be deposited on exchanges to label yield.
This structure, Xu outlined, embeds hedge-fund-degree risk straight away accurate into a product many customers handled be pleased digital money.
That’s the establish the hazard emerged.
He contrasted USDe with tokenized money market funds such as BlackRock’s BUIDL and Franklin Templeton’s BENJI, which would be designed around conservative, low-risk financial instruments.
USDe, by comparison, carries structural procuring and selling publicity.
“The adaptation is now now not beauty, it is key,” Xu infamous.
But on predominant platforms, that distinction modified into as soon as barely seen to day after day traders.
Repeated Collateral Cycling Pushed Leverage To Shameful Ranges
What grew to change into risk into systemic instability modified into as soon as the strategies loop Binance’s collateral structure enabled.
In line with Xu, customers began following a repeating technique:
- They reworked USDT and USDC into USDe to label yield.
- They extinct USDe as collateral to borrow USDT.
- They reworked the borrowed USDT support into USDe.
They repeated the cycle over and a few other time.
Every loop stacked extra leverage onto the map.
On paper, traders saw APYs balloon to 24%, 36%, even above 70%. Because these alternatives existed on one in every of the world’s largest exchanges, many assumed the chance modified into as soon as minimal.
Undoubtedly, leverage modified into as soon as quietly compounding across your complete market.
Systemic publicity wasn’t remoted to 1 platform, it unfold globally.
And as soon as enough stress built up, all it took modified into as soon as a rather little shock to raise the structure down.
Depegging Triggered Liquidation Cascades Within the course of The Market
When volatility in a roundabout contrivance hit, the weak point of the map surfaced straight.
USDe began to depeg.
That single crash triggered big pressured liquidations as leveraged positions unraveled in hasty succession. Collateral values dropped, margin calls accelerated, and automatic promote-offs flooded the market.
Xu also pointed to risk management gaps around sources be pleased WETH and BNSOL, which amplified designate crashes even extra.
Some tokens temporarily traded end to zero as liquidity vanished.
The consequence modified into as soon as one in every of basically the most violent liquidation events in crypto history.
“The wreck to global customers and corporations, collectively with OKX potentialities, modified into as soon as severe, and recovery will take time,” Xu talked about.
What had began as a yield promotion ended as a systemic breakdown.
Alternate Leaders Face Rising Tension Over Danger Transparency
In spite of the engaging critique, Xu pressured that his purpose is now to now not attack Binance for my part but to highlight the deeper structural concerns that allowed such risk to salvage now now not infamous.
He warned that originate dialogue might presumably well trigger backlash and misinformation but insisted that transparency is important if crypto is to outmoded accurate into a true financial map.
“Because the largest global platform, Binance has outsized influence, and corresponding responsibility, as an exchange chief,” he acknowledged.
In Xu’s search, lengthy-term belief can now now not be built on aggressive yield incentives, excessive leverage, or marketing and marketing that blurs right risk.
As an different, exchanges must prioritize:
• Sure risk disclosure
• Guilty collateral frameworks
• Limits on recursive leverage
• Market steadiness over transient user boom
The exchange, he added, desires management centered on sustainable innovation, now now not a winner-take-all mindset the establish criticism is handled as hostility.
A Turning Level For Crypto Market Building
The October fracture is increasingly extra being seen now now not as an remoted event, but as a structural be-careful name.
Upright as the 2022 collapses reshaped custody and proof-of-reserves practices, this latest meltdown is now forcing onerous conversations around leverage label, yield merchandise, and how exchanges latest risk to customers.
Enormous title Xu’s feedback have already fueled broader debate amongst traders, analysts, and platform operators.
If his analysis holds, the remark lesson of October isn’t about one token depegging, it’s about how long-established crypto infrastructure can quietly flip advanced financial engineering into mass-market risk.
And except the exchange corrects these strategies loops, the next fracture might presumably well arrive even sooner.
Disclosure: Here is now now not procuring and selling or funding advice. Continuously stop your research ahead of wanting for any cryptocurrency or investing in any companies.
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