OKX founder Star Xu has publicly accused Binance of causing the October Bitcoin flash crash. Xu claims irresponsible yield campaigns on the platform pushed traders into unsustainable leverage. He specifically pointed to the USDe token, issued by Ethena, as a key factor in amplifying the market's downturn, leading to billions in liquidations. The debate highlights ongoing concerns about market manipulation and risk management within the crypto sector.

The October 10th crash saw nearly $20 billion in liquidations, sparking debate about the underlying causes. Xu believes Binance's promotional practices encouraged excessive leverage, making the market vulnerable to a sell-off. The situation underscores the risks associated with complex financial instruments and the need for greater transparency. The market's microstructure fundamentally changed after that day according to Xu.

However, others dispute Xu's claims. Haseeb Qureshi of Dragonfly Capital argues the crash was due to broader market factors and not a single entity. The argument reveals deeper divisions within the crypto community regarding market stability and responsibility. This back-and-forth illustrates how the crypto industry continues to grapple with regulatory oversight and self-policing.

The controversy underscores the need for greater scrutiny of complex financial products and the potential for market manipulation. The incident raises questions about the role of exchanges, the impact of leverage, and the need for clearer risk disclosures. Investors should be aware of the inherent risks associated with leveraged trading in volatile markets.