OKX chief executive officer Star has asserted that Binance’s marketing campaign helped trigger the October crypto market decline, according to a report citing a January post on X. The piece contends that the October drop was not accidental but the result of irresponsible marketing by entities like Binance, with effects that permanently altered market microstructure and led to losses exceeding those seen in the FTX collapse.
Star further alleged that Binance offered USDe at a 12% APY and allowed USDe to be used as collateral on par with major stablecoins, under a temporary user-acquisition program with no clear caps. Users were reportedly nudged to convert their USDT/USDC into USDe to chase yields, while risk disclosures were insufficient.
From a user perspective, USDe appeared no different from existing stablecoins, but the underlying risk was significantly higher. By repeatedly converting USDe to USDT to collateralize, users achieved artificial annual yields of 24%, 36%, and even 70%, a phenomenon widely perceived as low risk due to its availability on large platforms. This dynamic contributed to a rapid buildup of systemic risk across the global crypto market.
The period saw heightened volatility, with USDe decoupling and triggering cascading liquidations. Risk-management weaknesses surfaced for assets such as WETH and BNSOL, exacerbating the market downturn. Some tokens traded near zero, and the fallout inflicted material losses on OKX customers as well as global users and businesses, with recovery expected to take substantial time.
Leave a Reply