Wintermute CEO Defends Binance Amid October 10 Market Crash Controversy
- What Did Wintermute’s CEO Say About Binance’s Role in the Crash?
- OKX’s Star Xu Points Finger at Binance’s USDe Strategy
- Binance Fires Back: "Whales Know the Truth"
- Was Trump’s China Tariff Threat the Real Trigger?
- FAQs: The October 10 Crash Unpacked
The cryptocurrency market witnessed one of its most turbulent days on October 10, sparking heated debates about the role of exchanges like Binance in the crash. Wintermute CEO Evgeny Gaevoy stepped into the fray, defending Binance against allegations that it triggered the worst liquidation event in crypto history. Meanwhile, OKX CEO Star Xu accused Binance of enabling risky leverage loops. This article unpacks the drama, the data, and the aftermath—because in crypto, the stakes are always high.
What Did Wintermute’s CEO Say About Binance’s Role in the Crash?
Evgeny Gaevoy, CEO of Wintermute, publicly challenged claims that Binance’s software glitches caused the October 10 market meltdown. In a sharply worded statement, he argued that the crash was a "flash crash on an extremely Leveraged market," exacerbated by low liquidity and macroeconomic shocks. "I wish public figures would choose their words more carefully," Gaevoy wrote, dismissing the "bug" narrative as oversimplified. His take? The crash was inevitable given the fragile state of the market that Friday night—thin liquidity, sky-high leverage, and a dash of macro panic.
OKX’s Star Xu Points Finger at Binance’s USDe Strategy
Star Xu, CEO of OKX, didn’t hold back. He accused Binance of promoting USDe—a synthetic stablecoin he called a "speculative tokenized fund"—without adequate risk warnings. According to Xu, Binance’s 12% APY campaign for USDe conversions encouraged users to create dangerous leverage loops: converting stablecoins like USDT to USDe, using it as collateral to borrow more USDT, and repeating the cycle. At its peak, these loops generated artificial APYs of 70%, amplifying systemic risk. When volatility hit, USDe depegged, triggering cascading liquidations. "Some tokens briefly traded near zero," Xu noted, referencing the chaos. He warned that the fallout for users and platforms like OKX could take months to resolve.
Binance Fires Back: "Whales Know the Truth"
Binance co-founder Yi He countered Xu’s claims on X (formerly Twitter), implying critics lacked firsthand experience: "Whales trading on Binance know best what happens when the tide goes out." She also dismissed allegations from Ark Invest’s Cathie Wood, who blamed a Binance "software bug" for the $28 billion wipeout. Binance later released a detailed statement pinning the crash on macro shocks, ethereum network congestion, and risk management gaps among market makers—not its infrastructure. The exchange paid $328 million in user reimbursements, up from an initial $283 million.
Was Trump’s China Tariff Threat the Real Trigger?
Beyond the exchange drama, many analysts point to a broader catalyst: Donald Trump’s surprise announcement of potential 100% tariffs on Chinese imports. The news sent Bitcoin and Ethereum plunging, compounding the leverage-driven panic. USDe’s price cratered to $0.65 on Binance (versus $1 elsewhere), exposing fragility in synthetic stablecoins. By January 30, Binance had stabilized, but the scars remain—a reminder that in crypto, even the biggest players aren’t immune to black swans.
FAQs: The October 10 Crash Unpacked
What caused the October 10 crypto crash?
A perfect storm of high leverage, low liquidity, and macroeconomic fears—sparked by Trump’s tariff threats—cascaded into a flash crash. Binance’s USDe promotions and OKX’s warnings about leverage loops added fuel to the fire.
How much did Binance compensate affected users?
Binance paid $328 million in reimbursements, up from an initial $283 million within 24 hours of the crash.
Did a Binance software bug cause the crash?
Wintermute’s CEO and Binance denied this, attributing it to market conditions. OKX’s Xu, however, criticized Binance’s risk management around assets like WETH and bnsol.
