Binance announced that it will pay 1 million dollars compensation to its users affected by the Cyber Earn incident. The altcoin, which has been trending in the past weeks, encountered serious problems just one day later.
Binance allocates $1 million to the Cyber event
A recent cross-chain bridging issue prevented users from withdrawing their CYBER Earn reserves on Binance. Binance is now preparing to refund 1 million Tether ($1 million) to its victim users.
The exchange announced on September 7 that it would compensate those affected by the CYBER bridging issue that occurred on Korean cryptocurrency exchange Upbit last week. This event led to price differences in the listed CYBER tokens. As a result, arbitrageurs profited from the difference by borrowing CYBER from Binance. In contrast, Binance users who staked CYBER in the Earn Program were unable to reach their credit limit because the assets they staked were borrowed. For this reason, they could not withdraw for a short time.
In the official announcement, Binance explains what happened in the Cyber Earn event as follows:
Except for Proof-of-Stake (PoS)-based products, the majority of crypto flexible financial products generate revenue by lending users’ subscribed assets to other users through Margin or collateralized loans. In extreme cases, borrowers may not be able to repay their loans on time or the withdrawal of subscribed assets may experience some delays. This happened on 2023-08-31
What’s next?
Binance stated that going forward, it will take new measures for periods when token volatility is high. Accordingly, it plans to increase interest rates on staked assets to discourage lending. For refunds, 800,000 Tether and 871 CYBER will be paid to 887 users who were unable to withdraw their CYBER products during the incident. Additionally, 200,000 USDT worth of vouchers sponsored by the CyberConnect Foundation will be distributed to all users affected by the incident. This distribution is regardless of which users choose to withdraw their tokens or not. Binance also states:
Binance reserves the right, in its sole discretion, to modify or cancel this announcement at any time and for any reason without notice.
cryptocoin.com As we reported, CyberConnect (CYBER) debuted on September 1 with Binance Launchpad. The altcoin, which became popular in a short time, later caused grievances with the price difference between different exchanges. When CYBER was trading at $10 on Binance, it was making an ATH of $15 on Upbit. Trend altcoin achieved its second big boom with the partnership with Alchemy Pay. CYBER is currently trading at $5.89 after dropping almost more than 50%.
