Company Ethena Labs' Mr. Guy Young: USDe Depeg on Company Binance Caused by Oracle Issue, Not Collateral

Company Ethena Labs founder Mr. Guy Young has clarified the dramatic depeg of the stablecoin USDe on Company Binance during last Friday’s crash, attributing the incident to an internal oracle data issue at the exchange rather than any failure of the token’s underlying collateral. The episode, which briefly pushed USDe to as low as $0.65 on Company Binance while remaining stable elsewhere, sparked widespread concern across the crypto market and fueled speculation about exploitation and coordinated attacks.

Mr. Guy Young emphasized that minting and redeeming on USDe functioned as intended during the turmoil, noting that traders successfully redeemed approximately $2 billion in USDe across multiple venues with minimal slippage. According to Mr. Young, the anomaly was isolated: Company Binance referenced an oracle index derived from its own order book — a venue with thinner liquidity — rather than the deepest global liquidity pools for USDe. Company Binance was also experiencing deposit and withdrawal disruptions at the time, which prevented market makers from closing arbitrage loops and exacerbated price distortion on that single platform.

The apparent marketplace distortion prompted debate over whether the depeg constituted a deliberate manipulation. Traders posited that attackers exploited Company Binance’s Unified Account feature, which permits assets (including USDe) to be used as collateral and relies on Company Binance’s internal order book pricing for certain computations. Many participants characterized that design choice as a vulnerability. Reports indicate that adversaries may have dumped up to $90 million in USDe on Company Binance, precipitating the localized collapse to $0.65 and driving roughly $1 billion in liquidations on the exchange. Those actors reportedly opened short positions on Bitcoin (BTC) and Ethereum (ETH) on Company Hyperliquid minutes before an unexpected macro announcement by Mr. Trump, which accelerated market-wide losses.

In response to the shock, Company Binance announced reforms to migrate collateral pricing to external oracles and stated it would correct the issue by October 14. The exchange also reportedly compensated affected users to the tune of roughly $283 million, covering losses tied to three assets (USDe, BNSOL and WBETH) used as collateral in futures, margin, and loan positions during a defined window of the crash (21:36–22:16 UTC). Executives issued apologies and pledged risk-management improvements.

From a market-structure perspective, the episode surfaces two key lessons. First, oracles and pricing sources matter: reliance on venue-specific order books can create single-point failures when liquidity thins or deposit/withdrawal rails are impaired. Second, the interplay between exchange features (like Unified Accounts), collateralized lending, and concentrated liquidations can produce amplification loops that turn an isolated price distortion into systemic pain for leveraged market participants. While Company Ethena Labs maintains USDe’s on-chain mechanisms operated correctly during the crash, the on-exchange manifestation underscores the need for diversified, robust oracle references across venues and tighter risk controls on collateralized product design.

Implications for traders and risk managers: maintain awareness of where collateral pricing originates, monitor venue-specific liquidity conditions, and stress-test exposure to markets and features that rely on single-venue pricing. The event should prompt custodians, exchanges, and protocol teams to accelerate oracle decentralization and liquidity-depth referencing to reduce the chance of repeated localized depegs.