Binance To Refund Users $1 Million In USDT Following CyberConnect Incident
07 Setembro 2023 - 07:00PM
NEWSBTC
Binance, one of the leading cryptocurrency exchanges, has recently
decided to refund users $1 million USDT (Tether) following an
incident related to the CyberConnect (CYBER) token. The
refund aims to compensate users affected by a price discrepancy on
listed CYBER tokens due to liquidity constraints on the Korean
cryptocurrency exchange Upbit. Related Reading: Make Or Break:
Bitcoin Fate Hangs On The Edge Of The 200-Week EMA Binance
Addresses CyberConnect Woes As described by Binance, the incident
unfolded when a liquidity crunch on CYBER cross-chain bridges
hindered transactions on Upbit. This led to a price disparity
between Upbit and other exchanges, attracting arbitrageurs who
borrowed CYBER from Binance to profit from the price
difference. Consequently, Binance users who had staked CYBER
in its Flexible Earn Program could not redeem their assets since
the staked tokens had been borrowed, reaching the loan limit. In
response to the situation, Binance acknowledged users’ feedback and
sincerely apologized for the inconvenience caused. The exchange
affirmed its commitment to prioritizing users’ interests and
maintaining high transparency within the community. Binance
provided a detailed account of the events leading to the incident.
It explained that the liquidity crunch on CYBER (ERC20) tokens
resulted in a surge of loan requests for CYBER, triggering
Binance’s risk management protocol. The exchange had to halt
new loan requests and increase loan interest rates significantly.
However, due to the substantial volume of redemption requests,
Binance faced challenges in fulfilling them immediately despite
maintaining a maximum borrowing limit as a buffer for redemptions.
Stricter Reviews And Potential Delistings Moving forward, Binance
outlined measures to enhance user experience and mitigate similar
risks. These measures include dynamically adjusting loan interest
rates and strengthening risk management protocols. According
to their September 7 announcement, Binance also committed to
conducting stricter reviews of tokens with smaller market caps and
potentially delisting tokens with lower liquidity from certain
programs. To compensate affected users, Binance announced a
distribution plan for the $1 million USDT refund. It stated
that 887 impacted users who failed to redeem their CYBER Simple
Earn Flexible Products positions within a specific timeframe would
receive a share of USDT tokens from the refund pool and additional
CYBER tokens. The distribution would be proportionate to the
daily average positions of the eligible users. All other users who
held CYBER Simple Earn Flexible Products positions during the
mentioned period would receive an equal share of CYBER Locked Trial
Fund vouchers sponsored by the CyberConnect Foundation. Related
Reading: Bitcoin Could Decline Further Before A Rebound, Here’s Why
As the cryptocurrency industry continues to evolve, incidents like
these serve as reminders of the importance of robust risk
management measures and continuous improvements to safeguard user
interests and maintain trust in the ecosystem. Binance Coin (BNB)
is currently trading at $215, in line with the prevailing market
trend of stagnation. It has experienced a slight decrease of 0.2%
over the past 24 hours and a 1.3% decline over the seven days.
These figures indicate a relatively stable performance for BNB
amidst the market conditions. Featured image from iStock, chart
from TradingView.com
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