OKX CEO Criticises CZ Over Binance’s $800M Crypto Crash Compensation

OKX CEO Star Xu has criticised Binance founder Changpeng Zhao, known as CZ, for describing Binance’s $800 million compensation to affected users after the October 10, 2025, crypto market crash as a voluntary goodwill gesture.

In a post on X, Xu argued that the characterisation downplays the scale of the losses suffered across the cryptocurrency market. The October crash triggered approximately $19 billion in liquidations within 24 hours, making it one of the largest liquidation events in crypto market history.

The disagreement has renewed debate over Binance’s role in the crash, the risks associated with leveraged crypto trading, and the responsibilities exchanges have when market volatility causes widespread losses.

Star Xu Challenges Binance’s Compensation Narrative

Xu questioned the emphasis on Binance’s decision to compensate affected users voluntarily. According to reports published on October 12, 2026, CZ had described Binance’s compensation of approximately $800 million as a decision the exchange made despite having no legal obligation to do so.

Xu argued that focusing on the voluntary nature of the payment overlooks the broader financial damage caused by the market crash. The October 10 event wiped out billions of dollars in leveraged positions and affected traders across multiple cryptocurrency exchanges. Xu believes the scale of those losses should remain central to discussions about the incident rather than allowing the compensation figure to dominate the narrative.

However, the $800 million compensation figure and the estimated $19 billion in liquidations measure different things. The former refers to payments to affected users, while the latter represents positions forcibly closed across the market. They should not be treated as directly equivalent measures of financial loss.

October Crypto Crash Triggered $19 Billion in Liquidations

The October 10, 2025, crash followed heightened macroeconomic uncertainty, including escalating trade tensions between the United States and China. The resulting market sell-off triggered a liquidation cascade as falling cryptocurrency prices forced leveraged traders to close their positions.

Estimates put total liquidations at approximately $19 billion within 24 hours, with long positions accounting for most of the losses. More than 1.6 million accounts were reportedly affected. Leveraged trading allows users to open positions larger than their available capital. Although this can amplify potential returns, it also increases the risk of rapid losses when prices move against a position.

During periods of sharp volatility, forced liquidations can intensify selling pressure. As positions close and prices fall further, additional traders may face liquidation, creating a cycle that spreads losses across the market. The scale of the October event has since prompted industry participants to debate whether excessive leverage, limited liquidity, exchange-specific issues, or a combination of factors made the crash more severe.

Binance and OKX Disagree Over the Causes

The dispute between Xu and CZ extends beyond compensation to the underlying causes of the October crash. Xu has previously criticised Binance’s promotion of Ethena’s USDe, a synthetic dollar asset designed to generate yield through trading and hedging strategies. He argued that encouraging users to treat USDe like a conventional stablecoin while using it within leveraged trading strategies could expose them to risks they might not fully understand.

In Xu’s view, these leveraged strategies contributed to the severity of the October liquidation cascade. Binance has offered a different explanation. The exchange has attributed much of the market disruption to macroeconomic pressures, excessive leverage, and technical issues during the period of extreme volatility. CZ has also rejected claims that Binance deliberately caused the crash, pointing to broader market conditions and the impact of trade-related news.

These competing explanations mean that responsibility for the scale of the crash remains disputed. Xu’s criticism represents the position of an industry participant, rather than a definitive finding that Binance caused the market-wide losses.

Crypto Exchange Accountability Remains Under Scrutiny

The disagreement highlights a broader question for the cryptocurrency industry: what responsibilities should exchanges assume when extreme market conditions cause substantial customer losses? Compensation can help affected users recover some funds, but it does not necessarily resolve questions about risk disclosures, trading infrastructure, product marketing, or the management of leveraged positions.

For traders, the episode also demonstrates the importance of understanding the risks associated with yield-generating assets and collateral arrangements. An asset designed to maintain a stable value may still carry risks related to its underlying strategy, market liquidity, or treatment by individual trading platforms. Using such an asset as collateral can introduce additional exposure when markets become volatile.

The debate over the October crash therefore extends beyond the amount Binance paid to affected users. It also concerns how exchanges communicate risks and respond when market disruptions affect customers across the industry.

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Editorial Takeaway

OKX CEO Star Xu’s criticism has reopened the debate over Binance’s $800 million compensation following the October 2025 crypto market crash. While CZ has presented the payments as a voluntary decision, Xu argues that the narrative should account for the much wider losses suffered across the market.

The disagreement also reflects continuing differences over the roles of leverage, yield-generating products, macroeconomic pressures, and exchange infrastructure in the liquidation event. With the causes and responsibilities still contested, the episode underscores the need for clearer risk disclosures and greater transparency when crypto markets experience extreme volatility.