Wintermute CEO Defends Binance After October 10 Crypto Market Crash: A Deep Dive

• What Sparked the October 10 Crypto Market Crash?
• Why Did Wintermute’s CEO Defend Binance?
• OKX’s Star Xu Accuses Binance of Fueling the Fire
• Binance Fires Back: "Whales Know the Truth"
• Could This Happen Again?
• Q&A: Unpacking the October 10 Crash

The crypto market crash on October 10 sent shockwaves through the industry, sparking debates about its causes. While some blamed Binance for triggering the worst liquidation event in crypto history, Wintermute CEO Evgeny Gaevoy came to its defense, arguing macroeconomics—not a "software glitch"—was the real culprit. Meanwhile, OKX CEO Star Xu accused Binance of enabling risky leverage loops. Binance denied responsibility, citing macro shocks and Ethereum congestion. This article unpacks the drama, analyzes the fallout, and explores what it means for crypto’s future.

What Sparked the October 10 Crypto Market Crash?

The crypto market plummeted on October 10, wiping out billions in leverage. Many pointed to Donald Trump’s announcement of proposed 100% tariffs on Chinese imports as the catalyst. Bitcoin and ethereum prices nosedived, triggering panic selling. But the chaos didn’t stop there. Stablecoin USDe lost its peg on Binance, briefly trading at $0.65 while maintaining parity elsewhere—a red flag for systemic risk. "It was a perfect storm," remarked one BTCC analyst. "Mega-leveraged positions in an illiquid Friday night market, amplified by macro news."

Why Did Wintermute’s CEO Defend Binance?

Evgeny Gaevoy, CEO of market maker Wintermute, pushed back against claims that Binance’s infrastructure failed. "Public figures should choose their words carefully," he tweeted. Gaevoy dismissed the "software error" narrative, attributing the crash to "a sudden drop in an over-leveraged market during illiquid hours, driven by macro news." His stance contrasted sharply with critics like Cathie Wood, who alleged Binance’s platform glitches exacerbated liquidations. Wood estimated $28 billion in Leveraged positions unraveled—a figure Binance later disputed.

OKX’s Star Xu Accuses Binance of Fueling the Fire

OKX CEO Star Xu dropped a bombshell: He accused Binance of encouraging users to convert stablecoins into USDe—a "tokenized hedge fund"—and using it as collateral without proper risk warnings. "Binance ran a promo offering 12% APY on USDe while treating it like USDT/USDC for collateral," Xu wrote. This, he claimed, created a dangerous loop: Users swapped USDT for USDe, borrowed more USDT against it, and repeated the cycle—artificially inflating APYs to 70%+ and piling on systemic risk. When volatility hit, USDe depegged, triggering cascading liquidations. Tokens like WETH and BNSOL briefly traded near zero. "The damage will take time to repair," Xu warned, adding that OKX faced coordinated FUD for speaking out.

Binance Fires Back: "Whales Know the Truth"

Binance cofounder He Yi responded bluntly on X: "Whales trading on Binance know what really happens when the tide goes out." In a since-deleted post, she suggested Wood—who isn’t a Binance user—was unqualified to comment. On January 30, Binance released its most detailed statement yet, blaming "macro shocks, market maker risk protocols, and Ethereum congestion." It maintained its core infrastructure stayed operational, dismissing UI display errors (like zeroed balances) as irrelevant to trade execution. The exchange also noted it compensated affected users, expanding an initial $283 million payout.

Could This Happen Again?

While Binance and critics spar over blame, the crash exposed crypto’s fragility under leverage. "This wasn’t just about one exchange," said a BTCC risk analyst. "It’s a wake-up call for the whole industry to improve risk controls." Data from CoinMarketCap shows stablecoin volatility spiked to annual highs post-crash, though markets have since stabilized. But as Xu noted, "Talking openly about systemic risks is uncomfortable—but necessary if crypto wants to mature responsibly."