Binance, one of the leading cryptocurrency exchanges, has recently decided to refund users $1 million USDT (Tether) following an incident related to the CyberConnect (CYBER) token.
The refund aims to compensate users affected by a price discrepancy on listed CYBER tokens due to liquidity constraints on the Korean cryptocurrency exchange Upbit.
Binance Addresses CyberConnect Woes
As described by Binance, the incident unfolded when a liquidity crunch on CYBER cross-chain bridges hindered transactions on Upbit. This led to a price disparity between Upbit and other exchanges, attracting arbitrageurs who borrowed CYBER from Binance to profit from the price difference.
Consequently, Binance users who had staked CYBER in its Flexible Earn Program could not redeem their assets since the staked tokens had been borrowed, reaching the loan limit.