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, faced serious problems after just one day.
Binance allocated $1 million to the Cyber incident
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 will compensate those affected by the CYBER bridging issue last week on Korean cryptocurrency exchange Upbit. This event led to price differences in listed CYBER tokens. As a result, arbitrageurs borrowed CYBER from Binance and profited from the difference. In contrast, Binance users who staked CYBER in the Earn Program could not reach their credit limit as 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:
Apart from Proof-of-Stake (PoS) based products, the majority of crypto-flexible financial products generate income by lending their subscribed assets to other users via 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 delay. 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. 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.
As reported by Kriptokoin.com, CyberConnect (CYBER) debuted with Binance Launchpad on September 1. 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%.
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