OKX Star: The crypto flash crash on October 11 was caused by Binance's irresponsible USDe financial activities

OKX CEO Star posted on the X platform, stating, "The events of October 10 were caused by irresponsible marketing activities from certain companies. Hundreds of billions of dollars were liquidated. Many industry participants believe that the damage is more severe than the FTX collapse. The root cause is not difficult to identify.

What actually happened

1. Binance launched a temporary user yield program, offering a 12% annualized yield on USDe, while allowing USDe to be used as collateral, enjoying the same treatment as USDT and USDC, with no effective restrictions.
2. Binance users were encouraged to convert USDT and USDC into USDe for substantial returns, but there was insufficient emphasis on the potential risks. From the user's perspective, trading with USDe was no different from using traditional stablecoins—yet the actual risk situation was significantly higher.
3. As users took the following actions, the risks escalated further: • Converting USDT/USDC to USDe • Using USDe as collateral to borrow USDT • Converting the borrowed USDT back to USDe • And repeating this cycle
4. This leverage cycle generated artificial annualized yields of 24%, 36%, or even 70%+, simply because they were widely regarded as "low risk" due to being offered by major platforms. Systemic risk rapidly accumulated in the global crypto market.
5. At that time, even a small market shock was enough to trigger a collapse. When volatility hit, USDe quickly decoupled. This was followed by a chain of liquidations, and the risk management weaknesses surrounding assets like WETH and BNSOL further amplified the crash. Some tokens traded close to zero prices at one point. Global users and companies (including OKX clients) suffered significant losses, and recovery will take time."