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Binance Announces $10 Million Compensation Plan

Binance announced it had made a decision earlier this week to compensate users who were affected by the Attack on DeFi Project, Cover Protocol. Hackers created an unlimitable supply of the Cover currency earlier this week. Binance has given more than $10,000,000 to eligible and affected users.

According to the official announcement, Binance will utilize its Secure Asset Fund to compensate users. The amount mentioned will be paid in BUSD or ETH. The exchange aims to protect its users in the future as well.

“After reviewing the COVER team’s latest compensation plan, we discovered that many Binance users who purchased COVER on Binance at the COVER snapshot time at 2020/12/28 08:11:06 (UTC), would see their tokens lose value. Binance decided to implement a plan that protects its users in response to the above. The official announcement states that in addition to the COVER compensation plan, Binance will use the SAFU Fund to recompense $10,107,505 USD to all affected users. This amount was distributed in 8,171,634.10 US Dollar and 2,581.16 Ethereum.

Cover Hack

Finance Magnates reported earlier this week about an attack on the Cover Protocol when the hacker exploited the Blacksmith farming contract of the project and minted infinite Cover tokens. After the news, the price of Cover token plunged more than 98%. As the attackers had unlimited supplies, the project team asked liquidity providers to limit activities related to Cover token. Following the news, Binance stopped trading Cover token.

Binance has just announced the details. Binance explained the situation in its latest announcement. “A large amount of COVER tokens (greater that the COVER circulating supply), were purchased by arbitrageurs on decentralized Exchanges and deposited onto Binance. This caused the price of COVERto decrease at an alarming pace and led to many Binance users suffering significant losses. The exchange stated that it had been in close contact with the COVER Protocol team for compensation discussions.


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