Binance to reimburse users $1M for Cyber Earn incident
Crypto exchange Binance is refunding users 1 million Tether ($1 million) over its handling of the CyberConnect (CYBER) token incident.
As narrated by the exchange on Sept. 7, a price discrepancy on listed CYBER tokens occurred the week prior due to a liquidity crunch constricting CYBER cross-chain bridges on Korean cryptocurrency exchange Upbit. This led to arbitrageurs borrowing CYBER from Binance to profit from the differential. In turn, Binance users who staked CYBER in its Flexible Earn Program were barred from redemptions as the staked assets had been borrowed, reaching the loan limit. The exchange stated:
Moving forward, Binance said it will take action to increase interest rates on staked assets to deter lending during periods of high token volatility.
For remedies, the exchange offered 800,000 Tether (USDT) to 887 impacted users who could not redeem their CYBER products during the incident, along with 871 CYBER in accrued staking rewards. Another 200,000 USDT worth of vouchers, sponsored by the CyberConnect Foundation, will be distributed to all users who staked CYBER via Binance Flexible Earn during the incident, regardless of whether they chose to redeem their tokens. The firm also wrote:
Related: Binance creates smart contract to refund users affected by $3M rug pull
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