Star Xu, founder of OKX, said Binance CEO CZ's $800 million compensation package for users affected by the October 10 market collapse significantly understates the total financial damage across crypto.
CZ highlighted the payout as Binance's response to user losses from the event. Xu argues the figure represents only a fraction of the broader market carnage.
On-chain data from October 10 showed rapid-fire liquidations across leveraged positions as prices plummeted. Derivative markets amplified the cascade—as underwater longs were force-closed, selling pressure mounted, triggering more liquidations in a feedback loop.
Xu's criticism targets the gap between what Binance quantified and what actually got wiped out across exchanges and DeFi protocols. The broader ecosystem—liquidity pools, margin positions, leveraged vaults—absorbed tens of billions in losses that Binance's compensation figure does not address.
The exchange highlights how major platforms frame market disasters. Binance's $800 million covers specific user claims on its platform. Xu is pushing back on the implication that this resolves the October 10 reckoning for the sector.
