Binance Faces Reckoning Over $800M Compensation for Market Crash

Background

OKX and Binance are two of the largest crypto exchanges in the world, and they compete for the same traders. The aftermath of 10/10 has included significant market downturns and regulatory scrutiny for Binance.

What Xu is arguing

The core of Xu's criticism is about proportion. In his view, presenting an $800 million compensation package as goodwill shrinks the event it was meant to address.

The USDe question

Xu also attributed the severity of the crash to Binance's promotion of USDe, a synthetic dollar token. According to Xu's argument, USDe was marketed with yields of around 12% APY, which encouraged traders to stack leverage on top of it.

Market impact

The October 10, 2025 crash produced approximately $19 billion in liquidations within 24 hours, with most of that damage landing on traders holding long positions. Bitcoin saw intraday drops ranging from 14% to 30% on the day, depending on the venue.

Implications for traders and exchanges

The dispute is less about personalities and more about what to expect from exchanges when things go wrong. If an $800 million payout is presented as a favor, users have little basis to expect compensation as a standard practice.

Binance's response

Binance has stated that 75% of the liquidations were due to macro factors and technical issues, not its product promotions.

Next steps

Whether Binance offers a fuller breakdown of how it reached its 75% attribution figure, and whether regulators take a closer look at how yield products are marketed alongside leverage, will be crucial in resolving the dispute.