Wintermute CEO Rallies Behind Binance Amid October 10 Crypto Market Meltdown

When the crypto markets plunged on October 10, fingers pointed instantly at the usual suspects. But one major player stepped forward with a surprising defense.

The Unlikely Advocate

Evgeny Gaevoy, CEO of leading algorithmic trading firm Wintermute, publicly challenged the narrative that pinned the crash on Binance. In a move that cut through the noise, he argued the exchange was a symptom, not the cause, of the day's volatility. His stance bypassed the herd mentality, suggesting deeper, systemic liquidity issues were at play.

Reading Between The Lines

The defense highlights a critical, often cynical truth in digital asset markets: major platforms become lightning rods for blame whenever portfolios bleed red. It's easier to target an exchange than dissect the complex web of leveraged positions and cross-margin calls that truly drive a cascade. After all, in finance, the simplest story often wins—even if it's wrong.

Gaevoy's intervention didn't reverse the losses, but it reframed the conversation. It forced a look beyond the single exchange, toward the fragile interconnectedness of the entire crypto ecosystem. A sobering reminder that when the tide goes out, everyone gets wet—some just have better umbrellas.

What did Star Xu say about the October 10 crash?

OKX CEO accused Binance of encouraging users to convert stablecoins into USDe, which he described as a “tokenized hedge fund,” and allowing it to be used as collateral without adequate risk warnings.

Xu wrote, “Binance launched a temporary user-acquisition campaign offering 12% APY on USDe, while allowing USDe to be used as collateral with the same treatment as USDT and USDC, and without effective limits.”

According to him, the risks escalated as more users converted USDT/USDC into USDe and used USDe as collateral to borrow USDT. The borrowed USDT is then converted back into USDe, and the cycle is repeated.

He stated that users created leverage loops that produced artificial annual percentage yields (APYs) of 24% and 36%, at some point exceeding 70%, accumulating systemic risk across global markets.

“When volatility hit, USDe depegged quickly. Cascading liquidations followed, and weaknesses in risk management around assets such as WETH and BNSOL further amplified the crash. Some tokens briefly traded near zero,” Xu wrote, referencing the loss of 1:1 peg that occurred in the heat of the crash.

Xu claims that the damage from the crash to users and companies, including OKX, was more severe, adding that recovery will take time.

The OKX CEO stated that speaking “openly about systemic risks is sometimes uncomfortable, but it is necessary if the industry is to mature responsibly,” and he stated that he will continue to do so.

He added that his company, OKX, may face significant misinformation attacks and coordinated FUD in the NEAR future as a result of his post.

Binance rejects claims that it was behind the market crash

Binance co-founder Yi He responded on X, writing, “Whales who trade on Binance know better what actually happens when the tide goes out.”

In a now-deleted post, she also suggested that Wood, who recently linked the crash to a Binance software glitch in a Fox Business interview, was not qualified to comment as a non-user of the platform. Wood stated that the leveraging event removed roughly $28 billion from the market.

Many people point to President Trump’s announcement of his plans to impose 100% tariffs on Chinese imports as the catalyst for the October 10 crash.

Bitcoin and ethereum prices dipped significantly and set off a chain reaction of panic trading activities.

USDe depegged on Binance, trading at $0.65 on Binance. Although the synthetic stablecoin traded closer to $1 on other exchanges.

On January 30, Binance issued its most detailed statement yet on the matter, pinning the LINK to the post on its X account.

The exchange attributed the crash to macro shocks, market maker risk protocols, and Ethereum network congestion. Binance stated that its core infrastructure was operational throughout and that interface display errors, one of which showed some balances as “zero,” did not affect actual trade execution.

Binance has completed $328 million in compensation to affected users, expanding an initial $283 million payout announced within 24 hours of the crash.

If you're reading this, you’re already ahead. Stay there with our newsletter.