USDT’s Dominance Reinforced Amid Market Turmoil: The Aftermath of the October 10 Flash Crash
The cryptocurrency market experienced a seismic shock on October 10, 2026, with Bitcoin plummeting 16.5% from $121,000 to $101,000 in a dramatic flash crash, erasing tens of billions in market value. The event has ignited a fierce public debate, spearheaded by OKX CEO Star Xu, who directly accused rival exchange Binance of triggering the collapse. Xu alleges that Binance's aggressive marketing campaign for a product called USDe—a tokenized hedge fund instrument—was misrepresented as a low-risk stablecoin alternative, offering unsustainable 12% APY yields that ultimately precipitated a massive, destabilizing sell-off. This incident starkly highlights the critical importance of transparency, accurate product classification, and robust risk management within the digital asset ecosystem. In such volatile conditions, the role of established, fully-backed stablecoins like Tether (USDT) becomes paramount. USDT's deep liquidity, widespread adoption, and perceived stability during crises reinforce its position as a foundational pillar and a primary safe-haven asset within the crypto economy. As regulatory scrutiny intensifies post-crash, the clear distinction between algorithmic or synthetic products and traditional, reserve-backed stablecoins is likely to benefit proven entities like USDT, potentially accelerating its integration into broader traditional finance (TradFi) systems as the sector matures and seeks greater legitimacy and trust.
OKX CEO Accuses Binance of Triggering October 10 Crypto Market Crash
OKX CEO Star Xu has publicly blamed Binance for the October 10 crypto market crash, which erased tens of billions in value. Xu claims the sell-off stemmed from Binance's aggressive marketing of USDe, a tokenized hedge fund product, as a low-risk stablecoin alternative.
The flash crash saw bitcoin plummet 16.5%, from $121,000 to $101,000. According to Xu, Binance's campaign offering 12% APY on USDe—while allowing it to be used as collateral like USDT or USDC—introduced hedge-fund-level risk into mainstream trading. Users were incentivized to convert stablecoins into USDe, exacerbating systemic vulnerability.
Xu asserts this episode has permanently altered crypto market microstructure. The fallout reportedly exceeded even the 2022 FTX collapse in severity, though Binance has yet to respond to these allegations.
TRON Network Hits Record 323M Monthly Transactions as Stablecoin Dominance Grows
TRON has solidified its position as a leading blockchain for stablecoin settlement and cross-border payments, with network activity reaching unprecedented levels in 2025. December saw 323 million monthly transactions—a 39% year-over-year increase—while active addresses peaked at 35.5 million.
The network's USDT supply surged to $81 billion, accounting for 40% annual growth. Daily stablecoin transfer values averaged $21.7 billion, with annual settlement volume hitting $7.9 trillion. Infrastructure upgrades and expanding DeFi integrations continue to drive real-world adoption across remittances and payment systems.
NY Prosecutors Challenge GENIUS Act, Alleging Stablecoin Issuers Profit from Fraud
New York Attorney General Letitia James and Manhattan District Attorney Alvin Bragg lead a coalition of prosecutors in opposing the GENIUS Act, claiming it enables stablecoin issuers like Tether and Circle to exploit regulatory gaps. The letter asserts the law lacks mechanisms to recover stolen funds, effectively sanctioning profits from illicit activities.
Tether and Circle reportedly generated $1 billion each in 2024 by investing reserve assets—including frozen funds linked to crimes. Circle holds $114 million in frozen reserves as of November, while Tether blacklisted 7,268 addresses and froze $3.3 billion in USDT since 2023, with over 2,800 actions tied to U.S. law enforcement cooperation.
The prosecutors warn the act's omissions incentivize bad actors, citing vulnerabilities in combating terrorism financing, drug trafficking, and crypto fraud. Circle's smaller-scale freezes—$109 million across 372 addresses—highlight divergent compliance approaches among issuers.
