Binance is in the process of establishing a secure asset fund in a move to protect its users. Binance, which by volume is the largest Crypto exchange in the world, decided on this as a measure in response to the trading suspension and unscheduled maintenance caused by irregular trades.
Secure Asset Fund for Users
The Cryptocurrency exchange will be creating a SAFU (Secure Asset Fund for Users) that will protect users from compromised future incidents. Binance will be raising funds for this project by storing ten percent of its trading fees in a cold wallet.
Binance temporarily suspended all trading activities after Syscoin (SYS) registered odd behavior in its trading patterns. Sebastien DiMichele, Syscoin co-founder, said that at one point the distributed network, which facilitates low-cost financial transactions, was selling at 96 BTC when it had in fact been valued at 0.00004 BTC.
In a Twitter post, SYS said that it requested exchanges to suspend SYS deposits and withdrawals after they noticed the odd behavior which was also included atypical Blockchain activity. The post went on to say that the problem was solved and that the Syscoin Blockchain was safe. It encouraged exchanges to reopen SYS trading.
System Maintenance Complete
The exchange confirmed that the disruption was caused by irregular trading by some API users. Some Reddit users who were keeping an eye on Binance’s API logs have reported that around eleven SYS were sold at the inflated price, which would be $7 million at the current market rates.
The system maintenance has since been completed, and all trading activities of SYS have resumed. As a way of protecting API users and improving their safety measures, the Crypto Exchange has completely removed the existing API keys and has asked its API users to create other keys. It has also advised its users against giving third-party service providers the ability to get their API keys and advised traders who are irregular API users to refrain from creating other API keys.
For safe accessibility, Binance has encouraged its users to make use of the IP whitelist functionality.
Compensation For Affected Users
Binance has announced that it will be offering compensation to those who were negatively affected. They will be required to open a new support ticket, and the compensation will be the offer of a zero-fee trading period from the 5th of July to July 14. They will also rollback all irregular trades.
All other Binance users will be receiving a 70 percent rebate on trading fees during this period, referrals not included. This rebate will be paid in the form of BNB (Binance Coin).
This is not the first time that Binance has prevented a potentially malicious attack. Earlier this year, hackers tried to inflate the price of Viacoin (VIA). The hackers tried using phished accounts to manipulate Viacoin’s price, this triggered the Crypto Exchange’s security system, and it froze withdrawals.
Another Crypto Exchange which fell victim to a hack attack, Bithumb, has been relatively successful in securing their systems. They have reportedly recovered almost half of the $31 million that was stolen.