Zhao Says Binance Not Responsible for $19 Billion October Crypto Crash

Highlights:

• Former Binance CEO Zhao said Binance did not cause the big October crash.
• Binance paid $283 million to help users after the market collapse.
• OKX CEO Star blamed Binance’s 12% USDe campaign for systemic market risks.

The cryptocurrency market is still feeling the impact of the October 10 collapse, which erased nearly $19 billion in a single day. Former Binance chief Changpeng Zhao, also known as CZ, rejected claims that Binance caused the massive liquidation. During a Q&A on Binance’s social media, he called the claims “far-fetched” and said Binance was not the main cause of the crash.

Zhao added that many people blamed Binance for the October 10 crash and expected the exchange to cover all losses. He firmly dismissed these claims. Bloomberg reported his remarks on January 30, more than three months after the crash that continues to affect markets worldwide. Binance faced more criticism during the crash when Ethena’s USDe stablecoin lost its $1 peg on the exchange. The coin fell to about $0.65 before recovering. This sharp drop was later linked to an internal Oracle issue specific to Binance.

🚨 UPDATE: Binance founder Changpeng Zhao (CZ) rejected claims that the exchange was responsible for last October’s crypto market crash. Speaking during a live AMA session, CZ described the accusations as “far fetched” and lacking any solid evidence.

Following the market… pic.twitter.com/hklmtroPgn

— CHAINISLE (@CHAINISLE_MCN) January 31, 2026

Binance Faces Criticism but Offers $283 Million Payout

Ethena Labs founder Guy Young said the problem happened because the exchange used an oracle index from its own order book instead of the deepest liquidity pool. At the same time, deposit and withdrawal issues stopped market makers from fixing the price through arbitrage. The event exposed weaknesses in trading systems and raised doubts about stablecoins’ reliability during extreme market swings. It also fueled concerns that Binance’s risk management was under pressure at a critical time.

Talk is cheap.

$283 million compensation on @Binance
$45 million recovery airdrop on @BNBChain and @four_meme_
Another $400 million recovery airdrop on @binance

Protect users. https://t.co/HZcff61Sv5

— CZ 🔶 BNB (@cz_binance) October 14, 2025

In response to the October crash, Binance compensated affected users with payments totaling around $283 million. The move was seen as an effort to restore confidence among traders and mitigate the damage caused by the liquidation wave. While the payout provided relief to many, questions remain about the long-term stability of platforms offering high-yield campaigns tied to collateralized assets.

OKX CEO Says Risky Marketing Caused October 10 Crash

OKX CEO Star said the October 10 crash, which wiped out tens of billions of dollars, was caused by risky marketing campaigns. He added that the crash changed the crypto market’s structure and caused damage worse than the FTX collapse.

Star explained that Binance ran a short campaign offering 12% APY on USDe. This encouraged users to convert USDT and USDC without fully understanding the risks. USDe is a tokenized hedge fund product and much riskier than regular stablecoins or tokenized money market funds. Users kept converting USDe and borrowing against it, which created leverage loops and pushed APYs above 70%. This built pressure across the market.

When the volatility occurred, the USDe lost its peg. This led to liquidations that further increased losses in other assets such as WETH and BNSOL. Many users and businesses, including OKX users, experienced significant losses. Star explained that he is highlighting risks in the system and not criticizing Binance. He emphasized that the industry should focus on transparency, responsible innovation, and market stability. He warned that repeating short-term yield campaigns and high leverage could cause the same mistakes again.

No complexity. No accident.
10/10 was caused by irresponsible marketing campaigns by certain companies.

On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day.… pic.twitter.com/N1VlY4F7rt

— Star (@star_okx) January 31, 2026