TLDR:
- OKX CEO Star claims Binance’s 12% APY USDe promotion blurred distinctions between stablecoins and hedge funds.
- Users created leverage loops by borrowing USDT against USDe collateral, repeating the cycle multiple times.
- Haseeb Qureshi notes Bitcoin bottomed 30 minutes before USDe moved, challenging the causation narrative.
- Technical failures including Binance API outages and Trump tariff announcements compounded October 10 volatility.
The October 10 cryptocurrency market crash continues to generate controversy months after the event. OKX Chief Executive Star has publicly blamed Binance for creating dangerous market conditions through irresponsible promotion of USDe.
The accusation centers on how Binance marketed the synthetic dollar without proper risk disclosure. Meanwhile, prominent venture capitalist Haseeb Qureshi has rejected the claims as implausible and politically motivated.
Marketing Strategy Created Systemic Risk Loop
Star outlined a specific sequence of events that allegedly caused the market breakdown. In his statement, he declared that “10/10 was not an accident. It was caused by irresponsible marketing.”
Binance launched a promotional campaign offering 12% annual percentage yield on USDe tokens. The exchange simultaneously accepted USDe as collateral with the same treatment as USDT and USDC.
However, USDe differs fundamentally from traditional stablecoins according to the OKX executive.
No complexity. No accident.
10/10 was caused by irresponsible marketing campaigns by certain companies.On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day.… pic.twitter.com/N1VlY4F7rt
— Star (@star_okx) January 31, 2026
Ethena Labs issues USDe through a complex financial structure. The protocol raises capital by selling USDe tokens to investors. It then deploys those funds into arbitrage and algorithmic trading strategies.
The resulting hedge fund positions get tokenized back into USDe. Traders receive yields generated from these active trading operations.
This structure contrasts sharply with money market fund tokens like BlackRock’s BUIDL or Franklin Templeton’s BENJI. Those products invest in low-risk government securities and cash equivalents.
USDe embeds hedge fund level volatility and counterparty risks. Star claims Binance’s marketing materials failed to communicate these crucial distinctions to users.
The combination of high yields and stablecoin-like treatment created powerful incentives for leverage. Traders converted USDT into USDe to capture the 12% returns.
They then posted USDe as collateral to borrow more USDT. The borrowed funds went back into USDe purchases. This cycle repeated multiple times across thousands of accounts.
When USDe lost its peg on Binance, the entire structure collapsed. Liquidations triggered additional selling in already weak markets for wrapped staked tokens.
Venture Capitalist Dismisses Timeline and Motivation
Dragonfly Capital founder Haseeb Qureshi challenged the narrative in a detailed response on social media. Responding to Star’s accusations, Qureshi stated that “this story is ridiculous.”
He pointed to fundamental problems with the cause-and-effect timeline. Bitcoin reached its intraday bottom approximately 30 minutes before USDe experienced significant movement on Binance. The liquidation cascade had already begun before any USDe depeg occurred.
With all respect to Star, this story is candidly ridiculous.
Star is trying to claim that the root cause of 10/10 was Binance creating an Ethena yield campaign, causing USDe to get overleveraged from traders looping it on Binance, which eventually unwound because of a small… https://t.co/IXlqLZI3DN pic.twitter.com/7YX529JAjN
— Haseeb ＞|＜ (@hosseeb) January 31, 2026
Qureshi questioned why Star raised these concerns now rather than immediately after the incident. Order book data and trading records have been publicly available for months.
Numerous analysts examined the crash in detail during October and November. The timing of the accusation suggests alternative motives beyond market transparency.
Markets experienced extreme stress on October 10 due to external factors. President Trump announced new tariff threats late on Friday when traditional markets were closed.
Cryptocurrency exchanges remained the only liquid venues for risk reduction. Bitcoin and Ethereum absorbed heavy selling pressure from institutional traders.
Technical failures compounded the volatility according to multiple market participants. Binance’s application programming interfaces experienced outages during peak stress.
Market makers lost the ability to maintain orderly books across exchanges. Price dislocations widened dramatically as automated hedging systems went offline.
The confluence of geopolitical news, technical failures, and concentrated liquidations created unprecedented market conditions.
