Major Exchange CEO Slams Binance: Did This Loop Fuel the Crash?

OKX founder and CEO Star Xu argued that one of the key causes of the cascade of liquidations in the October 10, 2025 crash was the ability to repeatedly borrow against USDe collateral on Binance.

In an appearance on the New Era Finance Podcast, reported by Wu Blockchain, Xu criticized Binance for promoting USDe, issued by Ethena, as a stablecoin. Describing USDe as a “tokenized hedge fund,” the executive said that a strategy designed to hedge price risk does not make a product risk-free.

Xu’s objection was not limited to how USDe was marketed. The OKX CEO argued that the borrowing mechanism using the asset as collateral increased investors’ leverage and exposed a serious gap in Binance’s risk controls.

How did the same collateral loop amplify risk?

In the structure Xu described, users could borrow USDT against USDe collateral, use the USDT they received to acquire more USDe, and repeat the process. Each new round, used to increase returns, also increased borrowing and the risk being carried.

The executive argued that this structure played a significant role in the cascade of liquidations during the October 10 crash, known as “1010.” His criticism thus focused less on a single product than on the leveraged positions that could be built up repeatedly through it.

He pointed to the delta-neutral strategy

The delta-neutral strategy used for USDe aims to offset the impact of price changes with opposing positions. According to Xu, using this approach does not mean the product carries no or little risk.

The OKX CEO’s remarks are an assessment of the causes of the crash; the causal link between the borrowing loop on Binance and the liquidations is presented as Xu’s view.