According to an announcement made on September 7th, cryptocurrency exchange Binance is refunding users 1 million USDT (1 million USD) due to the handling of the CyberConnect (CYBER) token incident.
Specifically, Binance explained that a price discrepancy on CYBER tokens listed occurred last week due to liquidity crises on the cross-chain CYBER connections at the South Korean cryptocurrency exchange Upbit.
This led to traders exploiting the price difference by borrowing CYBER from Binance.
In return, Binance users who had deposited CYBER into the exchange’s Flexible Savings Program will have their redemption suspended because the collateral assets had reached their borrowing limit.
The exchange clarified:
“Unlike Proof-of-Stake (PoS)-based products, most flexible crypto finance products generate income by lending users’ registered assets through reserve lending or collateral. In harsh circumstances, borrowers may not be able to repay the borrowed amount on time, or the repurchase of the registered assets may be delayed. This happened on August 31, 2023.”
To rectify this issue, the exchange will provide 800,000 USDT to 887 affected users unable to redeem CYBER products, along with 871 CYBER tokens as accumulated staking rewards.
Additionally, another 200,000 USDT voucher sponsored by the CyberConnect Foundation will also be distributed to all users who deposited CYBER through Binance Flex Earn during the incident, whether they choose to redeem the tokens or not.