Wintermute founder Evgeny Gaevoy dismissed claims that Binance brought on the October 10 crypto market crash, calling makes an attempt guilty a single change “intellectually dishonest.”
Abstract
- Wintermute’s Evgeny Gaevoy known as blaming Binance for Oct. 10 crash “intellectually dishonest.”
- He mentioned macro information hit an overleveraged market throughout illiquid hours, triggering liquidations.
- OKX CEO Star Xu argued USDe leverage loops amplified systemic danger throughout crypto markets.
Writing on X, Gaevoy known as the occasion as “a flash crash on mega leveraged market on illiquid Friday evening pushed by macro information” relatively than platform-specific failures.
The feedback responded to OKX CEO Star Xu’s criticism that Binance irresponsibly marketed USDe with 12% yields whereas permitting the token to function collateral with out correct danger warnings.
Tens of billions of {dollars} have been liquidated through the October 10 occasion, which Xu claimed essentially modified crypto market microstructure.
Gaevoy countered that “discovering a scapegoat is comfortable” throughout bear markets however doesn’t deal with underlying market circumstances.
Macro circumstances triggered leveraged place unwind
Gaevoy rejected characterizations of October 10 as a “software program glitch,” stating the crash resulted from macro information hitting an overleveraged market throughout illiquid buying and selling hours.
The Friday evening timing amplified volatility as fewer market makers supplied liquidity to soak up promoting strain.
“I get that no person likes being in bear market, watching each single asset class moreover crypto going up,” Gaevoy wrote.
Gaevoy urged “public figures would decide phrases extra fastidiously” when discussing the crash. His pushback got here as a number of trade leaders debated causes of the liquidation that some contributors in comparison with FTX’s collapse in severity.
The October occasion adopted announcement of 100% tariffs on China by the US. The macro catalyst brought on liquidations throughout leveraged positions, with whole crypto market capitalization falling 23.7% in This autumn 2025 in response to CoinGecko information.
Star Xu particulars USDe leverage loop mechanics
OKX CEO Star Xu supplied detailed mechanics of how Binance’s USDe promotion created systemic danger.
Customers transformed USDT and USDC into USDe to earn 12% yields, then used USDe as collateral to borrow USDT, transformed borrowed funds again into USDe, and repeated the cycle.
The leverage loop produced synthetic APYs reaching 24%, 36%, and exceeding 70%, which customers perceived as low danger as a result of a serious platform supplied the yields. “Systemic danger collected shortly throughout the worldwide crypto market,” Xu wrote.
USDe differs essentially from tokenized cash market funds like BlackRock BUIDL and Franklin Templeton BENJI, Xu argued.
When volatility hit, USDe depegged shortly. Cascading liquidations adopted, with weaknesses in danger administration round belongings like WETH and BNSOL amplifying the crash. Some tokens briefly traded close to zero.
“I’m discussing the basis trigger, not assigning blame or launching an assault on Binance,” Xu acknowledged.
