Crypto Power Players Feud: Decoding the True Culprit Behind the 10/10 Black Friday Crash

Blog Agent Posted On February 2, 2026

Introduction to the Chaos

The crypto world saw a massive shock on October 10, 2025. This day, now called the <10/10 Black Friday Crash>, wiped out between $19 billion and $28 billion in leveraged positions in just hours. Prices plunged, liquidations spiked, and even stablecoins like USDe on Binance dipped to as low as $0.65. This caused a $2.2 billion drop in its market cap on that exchange alone.

Months later, the fight over what really caused it rages on. Top from exchanges, market makers, and big investors are pointing fingers. Was it too much leverage? Risky yield offers? Or a glitch on one platform? This debate shows deep splits in the industry and lessons for the future.

What Happened on 10/10?

Picture this: Markets were riding high with huge open interest in derivatives, over $100 billion. Then, a sudden risk-off wave hit. Trade war news spooked traders. Automated systems kicked in, forcing sales across the board.

On Binance, USDe – a synthetic dollar from Ethena – saw wild price swings. It traded way below $1, sparking panic. Liquidations snowballed. But was this a one-off glitch, or something bigger?

Total liquidations: $19-28 billion
USDe low: $0.65 on Binance
Market impact: Billions in value gone in hours

Cathie Wood Points to Binance

ARK Invest boss Cathie Wood kicked off the blame game. On Fox Business in January 2026, she tied Bitcoin’s drop to a $28 billion deleveraging event. She called it a “ on October 10.”

Wood said forced selling from this drove most of the pain. She believes the worst is over now. Her words spread fast, putting heat on Binance.

Wintermute Founder Pushes Back

Not so fast, said Evgeny Gaevoy of Wintermute. He called it a macro flash crash, fueled by sky-high leverage, low liquidity, and risk systems yanking liquidity at once.

“Blaming one exchange is lazy,” Gaevoy tweeted. “It’s dishonest to find a scapegoat.” He stressed it was industry-wide, not one platform’s fault.

OKX CEO Star Xu’s Bold Claim

The fire grew when OKX CEO Star Xu jumped in with a detailed X post. “No complexity. No accident,” he said. Xu blamed reckless yield marketing and leverage perks.

He zeroed in on Binance’s short-term promo: 12% APY on USDe. Traders used it as collateral like USDT or USDC, with few limits. But USDe isn’t a plain stablecoin.

What Makes USDe Risky?

USDe from Ethena is a tokenized hedge fund. It invests in basis trades and algo strategies, then tokenizes the returns. Xu compared it to high-risk plays, not safe assets like BlackRock’s BUIDL or Franklin Templeton’s BENJI.

This setup lured users into over-leveraging, thinking it was low-risk. When markets turned, it all unraveled.

CZ Fires Back

Binance’s CZ (Changpeng Zhao) didn’t stay quiet. He questioned Xu’s motives, noting Dragonfly Capital – a big OKX backer – and Haseeb Qureshi calling Xu’s take “ridiculous.”

“Data speaks. Timelines don’t match,” CZ posted. It hinted at competing interests fueling the spat.

Binance’s Official Post-Mortem

Binance dropped its full report, calling out myths. They blamed a macro shock: trade wars, record $100B+ derivatives interest, and market makers pulling back via auto-risk tools.

Core systems worked fine. Yes, USDe, WBETH, and BNSOL glitched briefly. But 75% of liquidations happened before that. The crash was rolling already.

Binance stepped up: Paid $328 million to affected users, launched a $300 million “Together Initiative,” and added new safeguards like better institutional tools.

See Binance’s update: Here

Why This Debate Matters

The <10/10 Black Friday Crash> isn’t just history. It exposes risks in crypto:

Yield chasing: High APYs on ‘stable’ assets can hide dangers.
Leverage overload: $100B open interest is a powder keg.
Interconnected markets: One venue’s promo ripples everywhere.
CEO rivalries: Exchanges compete hard, sometimes publicly.

Is the crash inevitable from greed? Or avoidable with better rules? Leaders disagree, but all want safer markets.

Lessons for Traders and Investors

Don’t chase yields blindly. Understand assets like USDe – it’s not USDT. Watch leverage levels. Diversify. And follow macro news like trade wars.

Exchanges must set clearer limits on risky collateral. Regulators might step in too.

What’s Next for Crypto?

Debate continues, but recovery signs show. Bitcoin stabilized post-crash. New safeguards roll out. Yet, with high leverage back, another looms if unchecked.

This clash among highlights growth pains. Crypto matures, but volatility stays. Stay informed to navigate it.