{"id":21050,"date":"2026-01-31T18:45:48","date_gmt":"2026-01-31T18:45:48","guid":{"rendered":"https:\/\/bitunikey.com\/news\/wintermute-founder-says-binance-wasnt-at-fault-in-october-flash-crash\/"},"modified":"2026-01-31T18:45:54","modified_gmt":"2026-01-31T18:45:54","slug":"wintermute-founder-says-binance-wasnt-at-fault-in-october-flash-crash","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/wintermute-founder-says-binance-wasnt-at-fault-in-october-flash-crash\/","title":{"rendered":"Wintermute founder says Binance wasn\u2019t at fault in October flash crash"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">Wintermute founder Evgeny Gaevoy dismissed claims that Binance caused the October 10 crypto market crash, calling attempts to blame a single exchange \u201cintellectually dishonest.\u201d<\/p>\n<div id=\"cn-block-summary-block_c923a219fa74607b07722e0f2cbc0d38\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>Wintermute\u2019s Evgeny Gaevoy called blaming Binance for Oct. 10 crash \u201cintellectually dishonest.\u201d<\/li>\n<li>He said macro news hit an overleveraged market during illiquid hours, triggering liquidations.<\/li>\n<li>OKX CEO Star Xu argued USDe leverage loops amplified systemic risk across crypto markets.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<p>Writing on X, Gaevoy called the event as \u201ca flash crash on mega leveraged market on illiquid Friday night driven by macro news\u201d rather than platform-specific failures.<\/p>\n<p>The comments responded to OKX CEO Star Xu\u2019s criticism that Binance irresponsibly marketed USDe with 12% yields while allowing the token to serve as collateral without proper risk warnings.<\/p>\n<p>Tens of billions of dollars were liquidated during the October 10 event, which Xu claimed fundamentally changed crypto market microstructure.<\/p>\n<p>Gaevoy countered that \u201cfinding a scapegoat is comfy\u201d during bear markets but does not address underlying market conditions.<\/p>\n<h2 class=\"wp-block-heading\">Macro conditions triggered leveraged position unwind<\/h2>\n<p>Gaevoy <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/x.com\/EvgenyGaevoy\/status\/2017359502522323158\" target=\"_blank\" rel=\"nofollow\">rejected<\/a> characterizations of October 10 as a \u201csoftware glitch,\u201d stating the crash resulted from macro news hitting an overleveraged market during illiquid trading hours.<\/p>\n<p>The Friday night timing amplified volatility as fewer market makers provided liquidity to absorb selling pressure.<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Kind of wish public figures would pick words more carefully. 10\/10 was very obviously not a \u201csoftware glitch\u201d. It was a flash crash on mega leveraged market on illiquid Friday night driven by macro news. <\/p>\n<p>And since we are here, I get that nobody likes being in bear market,\u2026 <a rel=\"nofollow\" target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/t.co\/uUrwqrbS8t\">https:\/\/t.co\/uUrwqrbS8t<\/a><\/p>\n<p>\u2014 wishful_cynic (@EvgenyGaevoy) <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/EvgenyGaevoy\/status\/2017359502522323158?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">January 30, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<p>\u201cI get that nobody likes being in bear market, watching every single asset class besides crypto going up,\u201d Gaevoy wrote.<\/p>\n<p>Gaevoy urged \u201cpublic figures would pick words more carefully\u201d when discussing the crash. His pushback came as multiple industry leaders debated causes of the liquidation that some participants compared to FTX\u2019s collapse in severity.<\/p>\n<p>The October event followed announcement of 100% tariffs on China by the United States. The macro catalyst caused liquidations across leveraged positions, with total crypto market capitalization falling 23.7% in Q4 2025 according to CoinGecko data.<\/p>\n<h2 class=\"wp-block-heading\">Star Xu details USDe leverage loop mechanics<\/h2>\n<p>OKX CEO Star Xu provided detailed mechanics of how Binance\u2019s USDe promotion created systemic risk.<\/p>\n<p>Users converted USDT and USDC into USDe to earn 12% yields, then used USDe as collateral to borrow USDT, converted borrowed funds back into USDe, and repeated the cycle.<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\">\n<div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">No complexity. No accident.<br \/>10\/10 was caused by irresponsible marketing campaigns by certain companies.<\/p>\n<p>On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market\u2019s microstructure fundamentally changed after that day.\u2026 <a rel=\"nofollow\" target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/t.co\/N1VlY4F7rt\">pic.twitter.com\/N1VlY4F7rt<\/a><\/p>\n<p>\u2014 Star (@star_okx) <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/twitter.com\/star_okx\/status\/2017411129501426064?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"nofollow\">January 31, 2026<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n<p>The leverage loop produced artificial APYs reaching 24%, 36%, and exceeding 70%, which users perceived as low risk because a major platform offered the yields. \u201cSystemic risk accumulated quickly across the global crypto market,\u201d Xu wrote.<\/p>\n<p>USDe differs fundamentally from tokenized money market funds like BlackRock BUIDL and Franklin Templeton BENJI, Xu argued.<\/p>\n<p>When volatility hit, USDe depegged quickly. Cascading liquidations followed, with weaknesses in risk management around assets like WETH and BNSOL amplifying the crash. Some tokens briefly traded near zero.<\/p>\n<p>\u201cI am discussing the root cause, not assigning blame or launching an attack on Binance,\u201d Xu stated.<\/p>\n<\/p><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wintermute founder Evgeny Gaevoy dismissed claims that Binance caused the October 10 crypto market crash, calling attempts to blame a single exchange \u201cintellectually dishonest.\u201d Summary Wintermute\u2019s Evgeny Gaevoy called blaming&hellip;<\/p>\n","protected":false},"author":1,"featured_media":1993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-21050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/21050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=21050"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/21050\/revisions"}],"predecessor-version":[{"id":21051,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/21050\/revisions\/21051"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/1993"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=21050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=21050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=21050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}