Two of the cryptocurrency industry’s most prominent voices have publicly rebuked Binance on Wednesday, linking the largest liquidation event in crypto trading history to structural weaknesses on the world’s biggest exchange and to broader market consequences.
Short-Term Tactics Are Eroding Industry Trust
In a post on X, OKX founder and CEO Star Xu said the “10/10 incident” had been widely underestimated in terms of its long-term impact, describing it as a moment that caused “real and lasting damage” to the crypto ecosystem.
While not naming Binance directly, Xu criticized what he described as an industry-leading company that prioritized short-term traffic and attention over strengthening core infrastructure, protecting users, and building trust with regulators.
Xu accused competitors of repeatedly promoting “Ponzi-like schemes,” amplifying “get-rich-quick” narratives, and manipulating or closely associating with low-quality tokens to attract users.
He added that legitimate criticism is often suppressed not through transparency or accountability, but through aggressive narrative control and coordinated influencer campaigns, a pattern he said ultimately weakens the entire industry rather than strengthening it.
Cathie Wood Links Crash To Binance Software Failure
Xu’s comments coincided with unusually direct remarks from ARK Invest's chief executive of Cathie Wood during a Fox Business interview, where she explicitly linked recent market turbulence to a software glitch at Binance.
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Wood said the crypto ecosystem had spent the past two to three months dealing with the reverberations of the October 10 flash crash, which she described as a forced deleveraging event that wiped out roughly $28 billion across the system.
Wood said many market participants were hurt by the unwind, noting that Bitcoin (BTC) bore the brunt of the sell-off because of its superior liquidity.
She framed the episode as a systemic shock rather than ordinary volatility, arguing that such events matter deeply to institutional investors assessing crypto as a new asset class.
While Wood said she believes the deleveraging phase is largely complete, she emphasized that infrastructure reliability remains a central concern for professional investors evaluating long-term exposure, including through ARK’s spot Bitcoin ETF, ARKB.
What Happened On October 10?
On October 10, crypto markets experienced one of the largest liquidation events on record, with roughly $19 billion in leveraged positions forcibly closed within hours as prices fell sharply.
Bitcoin dropped more than 14% intraday, while Ether (ETH) and numerous altcoins saw even steeper declines.
Post-event analyses documented significant pricing dislocations on Binance, where some tokens briefly traded at near-zero prices compared with other exchanges, amplifying liquidations tied to internal pricing mechanisms.
Binance later attributed the incident to technical issues during extreme volatility and announced reimbursement programs covering hundreds of millions of dollars in user losses.
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