Binance, one of the world’s leading cryptocurrency exchanges, has issued a statement addressing concerns over the redemption of its CYBER Simple Earn Flexible Products. The announcement comes in the wake of a significant price discrepancy of the CYBER token between Upbit and other exchanges on August 31, 2023.
On August 31, 2023, a notable price difference was observed for CYBER between Upbit and other trading platforms. The discrepancy was linked to Upbit’s exclusive support for CYBER (ERC20) and the absence of a cross-chain bridge for CYBER (ERC20) and CYBER (BEP20). This led to a liquidity shortage for CYBER (ERC20) on Binance and other exchanges.
The rising price of CYBER prompted arbitrage traders to borrow the token, resulting in a spike in loan requests. Binance’s risk management protocol was triggered, halting new loan requests and significantly increasing loan interest rates.
Due to the high demand for borrowing CYBER and simultaneous redemption requests, Binance faced challenges in immediately fulfilling CYBER Simple Earn Flexible Products redemptions.
To address the situation and enhance user experience, Binance has outlined several measures:
* Dynamic adjustment of Crypto Loans and Margin interest rates, especially during high volatility periods.
* Implementation of a stricter risk management framework for tokens with smaller market caps. Tokens with reduced liquidity might face delisting from * various Binance products.
* Display of risk warnings for specific tokens and periodic reviews of borrowing limits.
* Introduction of a second confirmation step, highlighting potential risks before completing a subscription.
Compensation for Impacted Users:
Binance has committed to compensating affected users
* 887 users who couldn’t redeem their CYBER Simple Earn Flexible Products between August 29 and September 5, 2023, will share a pool of 800,000 USDT and an additional 871 CYBER. The distribution will be proportional to their daily average CYBER holdings during the specified period.
* All other users holding CYBER Simple Earn Flexible Products during the mentioned timeframe will equally share a pool of 200,000 USDT worth of CYBER Locked Trial Fund vouchers, sponsored by CyberConnect Foundation.
In their statement, Binance acknowledged the crypto industry’s nascent stage and expressed gratitude for user feedback, emphasizing their commitment to refining the platform.
CyberConnect has recently become a focal point of discussion in the cryptocurrency world. As previously reported by Blockchain.News, CYBER coin experienced a sharp 40% decline in a single day following the introduction of Proposal CP-1. Subsequently, CyberConnect announced its decision to reject the proposal and took full responsibility for the rumors suggesting that the proposal fueled manipulation of the CYBER token.
Image source: Shutterstock