OKX founder Star Xu used a New Era Finance Podcast interview recorded on Aug. 25, 2026 to lay out his views on crypto market cycles, European regulation, exchange governance, proof of reserves, a possible listing, Hyperliquid’s market structure, and the Oct. 10-11 market event tied to USDe. The market references and time markers in the discussion were framed around the recording date.
Xu said fintech companies should earn money from technology and services rather than from customer funds. On OKX’s listing plan, he said the goal is not fundraising but trust: public-company oversight and disclosure would let regulators and clients see more of what happens inside the firm.
Why he still backs crypto after years of crises
Asked why he remains optimistic after so many industry shocks, Xu looked back over roughly 15 years in crypto. He said Bitcoin went through fork disputes and 51% attacks in 2011 and 2012, with the price nearly falling to zero. In 2014, Mt. Gox, then the world’s largest exchange, lost 800,000 BTC belonging to customers and later went bankrupt. In 2016, Bitcoin faced another fork crisis as different teams pushed competing scaling paths, with BCH and BSV becoming part of the debate. Xu said his team once organized a meeting in Beijing where mining companies and people from Coinbase discussed how to solve Bitcoin scaling. More recently, the industry went through the FTX collapse and other failures.
His core view is that every crisis forces a repair process. Sometimes that takes a year, sometimes only a few months. Once the problem is addressed, he said, the industry tends to come back larger, stronger and structurally better than before.
Xu said that when he entered the sector in 2011, he did not imagine blockchain would become financial infrastructure or that Bitcoin would one day have ETFs trading on Nasdaq and the New York Stock Exchange. Even then, though, he believed Bitcoin represented a decentralized peer-to-peer network for self-custodied assets, with a supply model resembling gold and roots in the aftermath of the 2008 financial crisis.
Today, he said, self-custody, peer-to-peer networks, global reach and systems built on transparent ledgers amount to a better and more efficient financial toolset. That foundation produced Bitcoin and Ethereum, with Ethereum adding smart contracts on top of tokens. It has now expanded into tokenized stocks and tokenized sovereign debt, which he referred to in the discussion as stablecoins.
Xu said crypto and blockchain-related businesses have become one of the most important forces in finance. Over the next 10 years, he said, blockchain can build a better financial infrastructure for the world at a foundational level.
He compared that shift to the early internet. Xu recalled that when he first got online in college, connecting took about 50 seconds and loading Yahoo was slow. Today, people can send a message to the other side of the world in less than a second and hold a live video conversation across continents, as he was doing from Singapore while the host was in Amsterdam. Finance, in his view, has not modernized at the same pace as communications and media, and still rests on ideas from 50 or even 100 years ago.
He pointed to 24/7 trading as one example. Commodity markets, he said, can see sharp weekend moves when geopolitical events break, including recent changes in the Middle East that affected oil and gold. That creates stress for companies and financial institutions. CME Group and Intercontinental Exchange, or ICE, would like to support around-the-clock commodity trading, he said, but the bottleneck is not the exchange layer. It is the banking and settlement system, which does not run continuously. Blockchain and stablecoins, in his view, offer a better global settlement rail.
Bitcoin is declared dead almost every year, Xu said, yet the industry keeps growing because the underlying technical idea is better and can support a new financial system for younger generations. For companies and individuals alike, surviving cycles and keeping a long-term view matters.
Europe: heavy rules, but a unified market
On regulation, Xu said the period from 2026 to 2036 could bring bigger changes to crypto and blockchain than the previous decade did. Stablecoins and tokenized stocks, he said, fit the way younger users already live.
Young people are used to WhatsApp, Facebook, email, TikTok and live video, he said. If they are asked to stand in line at a bank branch for 30 minutes and bring a stack of documents just to open an account, many will choose Revolut instead. What they want is a global, instant, low-cost, always-on system for payments, investing and trading.
Xu said OKX began entering Europe in 2018, when Malta promoted its “blockchain island” vision and tried to attract crypto firms through regulation. The process turned out to be difficult. As a company founded in Asia-Pacific, OKX had to learn how to fit into the European system and how to build trust with regulators, customers and the local community.
From the pre-MiCA period into implementation, he said, the company may have had to deal with six or seven different regulatory regimes, including VASP, DORA, GDPR, MiFID, EMI and MiCA, possibly more. Even so, he called Europe’s decision to create a unified framework across 30 countries a good one.
Xu said firms from around the world are moving into Europe, not just local players. He named OKX from Asia-Pacific and U.S.-based Coinbase and Kraken as examples. They are setting up regional headquarters there because they see MiCA as a leading global framework. In his view, it gives crypto firms a chance to build a better financial system for younger users, help European residents and support the broader European economy.
Europe has world-class companies such as Mercedes-Benz, he said, but in many emerging sectors it does not have its own Google or its own GPT. It does have Revolut, which he described as a banking and fintech platform built for younger generations.
MiCA, he said, gives Europe a chance to become a global leader. Companies such as Revolut and OKX can use Europe as a base to build products with blockchain and crypto technology for customers worldwide, making investing, payments, financing and listings easier. Looking back in 10 years, he said, MiCA will likely have had a real economic impact on Europe. He added one caveat: fewer regulatory requirements would be better.
How an exchange survives cycles
Running a crypto company over the past decade has not been easy, Xu said. Every time the market thought Bitcoin was dying, the pressure rose. Then there were the technical demands: strong, layered custody systems to protect customer assets and a matching engine that runs around the clock. OKX may process trading volume in the trillions each year, he said, and it cannot afford mistakes.
Regulation was another challenge. Before 2022, some jurisdictions had started building frameworks, but in most countries regulators would ask, “Who are you? We do not have a framework for you,” Xu said.
Then FTX grew rapidly, built political connections and global influence, and collapsed with major customer losses. After that, regulators around the world suddenly came to crypto firms demanding compliance. Blocking IP addresses was not enough, Xu said. If a company still served users in a country, it could still be in breach.
For a crypto company that wants to survive and keep growing, the most important principle is protecting customer funds, he said. That has to hold under any conditions. Xu added that many crypto founders were very young, including himself at the time, and had never seen that much money before.
Before starting OKX, he said, he had been CTO at a previous company that raised venture capital, was later acquired, and gave him some money on exit. But OKX was different. Bitcoin was booming, new user registrations were doubling by the day, and one day he realized the company was managing $1 billion in customer assets. The next week, the team told him it was $2 billion. A month later, it was $10 billion.
At that point, he said, many people approached him with proposals, including some with bad intentions. Xu said he lives in Singapore but stayed away from what he called black holes in the industry, including Three Arrows Capital. Some people on his team had contact with the firm and were told it could help generate returns on those funds. He said he was not interested. Prime brokers also wanted credit lines or delayed forced liquidations, and he rejected those requests as well.
At a basic level, Xu said, OKX is a technology-based financial services company and should define itself as fintech. Finance means regulation, including anti-money laundering and sanctions compliance. Technology means making money from products and services, not from customer assets. That, he said, is the key principle for surviving cycles. New challenges will come, but integrity and customer fund protection remain central.
Governance, proof of reserves and a listing plan
As OKX expands from Asia-Pacific into Europe and the U.S., trust is the main issue, Xu said. The company has years of experience in Asia and a strong record on protecting customer assets, but in Europe and the U.S. it is still a newer entrant, and people may question or distrust it.
For Asia-Pacific firms going global, the biggest challenge is building a governance structure that meets European or U.S. standards so regulators and customers can understand how the company works in a familiar way. Transparency matters more than arguing with people and insisting the company is good, he said.
Xu said OKX has raised its governance standards over the past few years. It has a group board with investor representatives and independent directors. More than 50% of the board now consists of non-executive directors, meaning investor representatives or independent directors.
Below the board are legal, compliance and risk management functions, and all major business decisions go through review by the relevant teams. If a decision involves risk appetite, different teams submit proposals and the board makes the final call. Xu also said ICE, the parent company of the New York Stock Exchange, holds a seat on OKX’s board.
After the FTX collapse, OKX was one of the earliest companies globally to launch proof of reserves, he said, and it has now published monthly PoR reports for more than 40 consecutive months. Customers can use Merkle tree-based web tools to verify whether OKX holds the corresponding reserves. PoR is not perfect, he said, but it still matters.
He added that starting last year, OKX hired a Big Four accounting firm as its global financial auditor. That firm checks custody arrangements, verifies customer funds and reviews whether company funds are mixed with customer assets.
Xu said OKX also plans to push for a listing. The purpose is not to make money, because the company has already made money in crypto. For him, public-company supervision is the best way to build trust because it requires disclosure and gives regulators and customers visibility into the company.
He described those steps as part of OKX’s effort to win trust from European customers and regulators. He also said he personally plans to engage more directly with regulators and customers and become part of the European crypto community.
From exchange to broader financial services
Crypto is not just about creating assets, putting them into ETFs and having them trade on Nasdaq or the New York Stock Exchange, Xu said. That is only one business line. Crypto is a new technology that gives companies a chance to build financial services for younger generations.
Those services include managing money through wallets or bank account-like tools, paying friends and merchants, and investing in stocks, derivatives or certain investment contracts. For businesses, it also means making their assets accessible and usable by customers globally. Blockchain and crypto technology provide a better and more efficient way to do that, he said.
Xu said DeFi and DEXs have significant value. He cited Aave as an example and said OKX works closely with it, with Aave deploying on X Layer. On top of that infrastructure, he said, OKX can provide services to European users.
He pointed to a product in Europe called OKX Pay. Users can place stablecoins into Aave to earn interest. When they need to make a payment, a small portion is redeemed in real time and the payment is completed through the Visa or Mastercard network.
As tokenized stocks become more common, Aave can also support stock-backed borrowing, Xu said. Today, if someone holds stocks and wants financing against them, they usually need to go to an investment bank, negotiate rates and haircuts, and deal with a process that feels like a black box. With Aave and tokenized stocks, he said, borrowing against equities could become easier and more transparent.
His reading of Hyperliquid’s matching model
Xu first pointed to Uniswap as a strong model. It is also popular on X Layer, he said. The AMM model it created works especially well for long-tail assets because many of those assets do not have enough liquidity to sustain an order book.
Hyperliquid has also grown in recent years. Some people like it, some do not, and some think it should be regulated, Xu said. In the U.S., he added, President Trump and CFTC Chair Mike Selig have both said they want to bring Hyperliquid into the U.S. and under regulation.
To him, Hyperliquid looks similar to a standard order-book exchange on the surface, but the technology underneath is fundamentally different and creates a distinct liquidity microstructure.
Blockchains operate block by block, he said. Even if latency falls to 100 milliseconds, the system still runs on blocks, and the matching engine processes by block as well. A centralized exchange, by contrast, processes orders one by one as they arrive, following rules that are often shaped by regulation.
On-chain DEXs can assign priority to different actions within each block. Based on his understanding, Hyperliquid prioritizes cancellations before other orders. That benefits market makers because they can pull quotes first and only then face incoming taker flow.
If you watch Hyperliquid, Xu said, its order book often looks better, or at least better than that of many centralized exchanges. He said the main reason is this market-maker-friendly design. In his framing, Uniswap gives long-tail assets an AMM route, while Hyperliquid offers another route for lower-liquidity assets through a matching engine that is more favorable to market makers.
Regulated on-chain trading: X Layer and Exchange OS
Xu said Europe has a framework called DLT TSS, short for distributed ledger technology trading and settlement system. In his reading, it comes very close to what a regulated Hyperliquid would look like.
In Europe, operating a trading venue and offering derivatives requires an MTF license, or multilateral trading facility authorization, along with clearing and other infrastructure. Xu said his understanding is that the European Securities and Markets Authority, or ESMA, provides some exceptions for crypto derivatives, but stock perpetuals and stock futures still need to follow the requirements applied to traditional exchanges and clearing systems.
DLT TSS offers a path around some of that complexity, he said. If trading, the matching engine and clearing are all moved onto a blockchain, firms may qualify for exemptions from those more complicated requirements. OKX is interested in obtaining that kind of qualification, and Xu said it could create a chance to become the world’s first regulated Hyperliquid.
He said OKX has technology comparable to Hyperliquid’s, and possibly better, and is building it on X Layer under the name Exchange OS for decentralized order-book trading. The system supports CeDeFi wallets that require identity verification and KYC, and it also supports self-custody wallets. Different venues can choose different models.
Xu said OKX is working to bring verified-wallet models and on-chain trading models into Europe so the matching engine can be fully on-chain and fully transparent. Many crypto exchanges already have wallets on-chain today, he said, but still keep many functions centralized. DLT TSS could move matching and clearing further on-chain. Regulators might not even need constant reports from a company if they can connect directly to the blockchain and monitor misconduct in real time, he said.
Self-custody versus exchanges
Asked what users often overlook and how they can protect themselves from another FTX-like event, Xu said different users need different strategies. If someone is sophisticated enough to manage private keys, self-custody is a good model. OKX Wallet has millions of daily active wallet users, he said. The company often repeats a familiar line: not your keys, not your money.
Those users should not keep their main assets on centralized exchanges all the time, he said. They can transfer funds in when they need to trade and withdraw them back to their own wallets when they do not. But wallet management has risks too. Trust Wallet and other wallets can have vulnerabilities, and Ledger has had vulnerabilities as well. Even if a user never leaks a private key, assets can still be stolen.
When the host mentioned the COLDCARD wallet incident from about three weeks earlier, in which roughly $90 million in Bitcoin was stolen, Xu said the issue related to vulnerabilities in encryption and decryption algorithms tied to public and private keys.
For users without a technical background, he said, a regulated exchange is still the better option. People generally do not walk into a bank worried that the bank will simply steal their money, because regulators and inspectors are there to monitor whether it is operating honestly, though banks can still fail. For crypto companies, he said, regulation, audits by large accounting firms and transparency make them safer for non-technical users.
He also said users should be cautious if an exchange constantly advertises unreasonable yields or unusually high interest rates. He said he was not referring to OKX’s Deposit Match, which he described as a deposit promotion. He would also be suspicious if an exchange kept emphasizing how much money it had, how much customer money it held, or repeatedly asked users to trust it and leave funds with the company.
Protecting customer assets is the most basic requirement for a fintech company and one of the most important regulatory expectations, Xu said. For European users, choosing firms regulated under MiCA, MiFID and similar frameworks carries materially lower risk than using offshore exchanges, in his view.
The Oct. 10 event: USDe, looping collateral and cascading liquidations
Xu said the Oct. 10-11 event saw many customer accounts liquidated within seconds. Afterward, he explained the technical issues on X, though Binance disagreed with his interpretation. In his view, the data and facts are there.
Based on OKX’s research and observations, Binance had USDe on its platform at the time. Xu said he sees USDe as a tokenized hedge fund, even if it is called USDe. He added that Ethena is a good company and that he himself is an investor who joined very early as an angel investor.
The problem, he said, was that Binance marketed USDe as a stablecoin. In his view, it is neither a stablecoin nor a tokenized money market fund. Products such as BENJI and BUIDL are tokenized money market funds and, in his opinion, are much safer. USDe is closer to a tokenized hedge fund.
Ethena issues USDe when users deposit USDT, he said. Based on public disclosures, those funds are used for basis trading on exchanges including Bybit, OKX and Binance. Xu said he understands the strategy to be delta-neutral, but that does not mean the risk is zero or even low.
He pointed to the previous year’s Bybit hack, in which $1.5 billion was stolen. Ethena may have had significant exposure on Bybit at the time, he said. Bybit made customers whole, but if it had not been able to do so, the outcome would have been different. Even a delta-neutral strategy can still carry substantial risk.
For that reason, Xu said, a delta-neutral tokenized hedge fund still carries much more risk than a stablecoin. A stablecoin, in his view, should only invest in U.S. Treasury bills. The Federal Reserve can issue dollars, and sovereign debt has strong repayment backing, so the risk profile is fundamentally different.
He said the key issue on Oct. 10 was that Binance promoted USDe as a stablecoin and offered an 8% yield. If it had only offered the 8% yield, he said, that would have been one thing. But USDe could also be used as collateral for derivatives and margin trading, and that is where the problem began.
Xu gave a simple example. If he had $1 million in USDT, he could convert it into nearly $1 million in USDe and earn 8%, then post that USDe as collateral, borrow $950,000 in USDT, and convert that into another batch of USDe. The yield-bearing exposure would nearly double. If that loop were repeated five or 10 times, the annualized return could be magnified to 70% or 80%.
If any company could truly promise that this was a very safe and guaranteed investment model, Xu said, he could put up $10 billion. He added that he would not even need a 70% annualized return. At 20%, he said, he could still put up $10 billion.
But once the loop is stacked five or 10 times, even a small market move can trigger a broader collapse, he said. A large amount of USDe was also being used as collateral for other positions, including long Bitcoin and Ethereum trades. Once a shock hits, cascading liquidations begin. The market may assume the collateral is a stablecoin that should hold 1:1, but that assumption may fail. That can then force liquidations in other tokens as well, which Xu said helps explain why some token prices fell close to zero.
He cited Cathie Wood, who said in an interview that a huge amount of capital disappeared that night, possibly $20 billion or possibly $50 billion. Xu called it a serious risk-control failure that will have long-term effects on the industry.
He added that offering derivatives in Europe today requires MiFID-related authorization, and that framework includes extensive requirements around risk management, stress testing and market integrity. In his understanding, this kind of USDe looping would not be allowed under the current MiFID framework. He also said companies including Binance are smart and should learn a great deal from the episode.
FTX and the Oct. 10 event were both disasters for the industry, Xu said. They showed regulators, companies and the community that they need to do better. The industry has already spent more than a decade building, and it will still be here in another decade, so it should protect itself and push back against irrational behavior.
He said the market survived the shock after Oct. 10, and the bear market had lasted nearly a year by the time of the interview. Echoing Cathie Wood’s comments, he said the disappearance of large amounts of capital was one reason for the bear market. By the recording date, he believed conditions were improving and the market was recovering, while MiCA and MiFID were lifting standards above where they had been the year before.
His outlook for the next decade
Xu said he is very optimistic about the next few years, especially the next 10. Stablecoins, tokenized stocks, tokenized debt, and licensed centralized and decentralized exchanges will build a new financial system, particularly for younger generations. He believes it will be more efficient than many existing systems.
In a few years, he said, users may manage money, make payments and invest through a single wallet because many assets and stocks will already be on-chain. They may no longer need a traditional broker. A wallet or an OKX account could be enough to access most assets.
Self-custody technology can also be applied to asset management, he said. Today, people usually hand money to an asset manager. Over time, many asset-management algorithms could become on-chain bots. Users could let those bots execute strategies inside their wallets while still controlling the wallet themselves.
Custody, payments and investing are the most basic user needs, Xu said. In his view, the crypto and blockchain industry is now ready to become infrastructure for the daily lives of billions, or even tens of billions, of people.