Binance released a statement and resolution regarding the CYBER Earnings event, with affected users set to receive a total subsidy valued at 1 million USDT
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Binance released a statement and resolution regarding the CYBER Earnings event, with affected users set to receive a total subsidy valued at 1 million USDT
Binance has released a statement and resolution regarding the CYBER Earning event. The announcement indicates that the recent redemption quota issue with CYBER Earning has drawn continuous attention and discussion from the community. Binance stated that since its inception, it has always adhered to the principles of "User First" and "Open & Transparent," and places great importance on and respects every user's suggestions and feedback. The platform sincerely apologizes to users affected by this incident. Below is a detailed explanation and resolution for this event: 1. Background: Liquidity Crisis of CYBER Token on Ethereum Network On August 31, Upbit supported only the Ethereum network-issued CYBER token (ERC20), not the BNB Smart Chain network version (BEP20). At that time, the project team had no cross-chain bridge solution in place. Combined with price discrepancies between Upbit and other platforms, this led to insufficient liquidity of CYBER (ERC20) across Binance and other exchanges. Due to these arbitrage opportunities and the rapid rise in CYBER’s price, a large number of cross-platform traders began borrowing tokens for trading, causing a surge in demand for CYBER loans. This triggered Binance’s risk control mechanism to temporarily suspend lending, and lending interest rates were raised accordingly. Since Binance operates on a strict "real coin lending" principle—where each loan is backed by actual physical coins—the platform had reserved redemption reserve funds and made corresponding adjustments. However, these measures proved insufficient to meet the massive volume of redemption requests within a short timeframe under extreme market conditions. In the cryptocurrency market, flexible earning products (excluding PoS-based products) generate returns primarily from interest rates on margin lending and collateralized lending. Although Binance provided relevant product warnings and promptly implemented measures such as raising interest rates to encourage repayments, there may still be cases where users are unable to return borrowed coins during extreme market volatility, leading to potential delays or limits in redemptions.
Navigating Web3 tides with focused insightsTechFlow news — Binance has released a statement and resolution plan regarding the CYBER Earning event. The announcement states that the redemption limit issue with the CYBER Earning product has recently drawn ongoing attention and discussion from the community. Since its inception, Binance has always adhered to the principles of "users first" and "transparency." The platform places high importance on and respects feedback from every user, and sincerely apologizes to those affected by this incident. Below is a detailed explanation and proposed resolution:
1. Background: Liquidity Crisis of CYBER on Ethereum Network
On August 31, Upbit only supported the Ethereum network-issued CYBER token (ERC20), not the BNB Smart Chain version (BEP20). At that time, the project team had no cross-chain bridge solution in place. Combined with price discrepancies between Upbit and other platforms, this led to insufficient liquidity for CYBER (ERC20) across Binance and other exchanges.
Due to the arbitrage opportunity and the rapid rise in CYBER's price, many cross-platform traders began borrowing tokens for trading, causing a surge in borrowing demand. Binance’s risk control system triggered a temporary suspension of borrowing services and raised lending rates. As Binance follows a strict "real coin lending" model—where only actual available tokens are lent—the platform had set aside reserve funds for redemptions and made adjustments accordingly. However, these measures were still insufficient to handle the massive volume of redemption requests within a short timeframe under extreme market conditions.
In crypto flexible earning products (excluding PoS-based products), earnings are generated from interest on margin and collateralized loans. Although Binance provided appropriate product warnings and took timely actions such as raising interest rates to encourage repayments, under extreme market volatility, delays in borrowers repaying their loans—and consequently delayed redemptions—can still occur (as was the case with this CYBER incident). As a platform, we must balance the interests of both lenders and borrowers. In extreme scenarios, borrowers may also be unable to return borrowed assets immediately. Binance will continue optimizing its products to enhance user experience and better protect all users.
2. Product Improvements: Dynamic Adjustment of Deposit and Loan Rates, Enhanced Risk Controls
Based on feedback and lessons learned from this incident, we will implement the following product changes:
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During periods of extreme market volatility, the platform will significantly increase lending interest rates for borrowers, while simultaneously increasing deposit yields for savers;
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For tokens with smaller market caps, we will conduct stricter reviews; low-liquidity tokens will be delisted from Earning and lending services;
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Enhanced risk warnings will be added for small-cap asset earning products, further strengthening risk management and reducing maximum borrowable amounts;
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Product pages will include prominent alerts. When users subscribe to flexible earning products, a secondary pop-up disclosing risks will appear. Additional information such as withdrawable balance and token utilization rate will also be displayed during redemption.
3. Resolution Plan: Affected Users to Receive Total Compensation Worth 1 Million USDT
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The platform will allocate all revenue generated from the CYBER Earning product since its launch (871 CYBER) plus an additional budget of 800,000 USDT as compensation. A total of 887 users who experienced failed redemptions from the CYBER Earning product on the Earning platform between 08:00 on August 29 and 08:00 on September 5 will receive compensation based on their average daily CYBER holdings during that period. The compensation will be distributed within 7 business days after this announcement. Users can check via Wallet > Wallet History > Distributions.
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All other users who held CYBER in the Earning platform during the same period will share equally an additional 200,000 USDT worth of CYBER fixed-term experience vouchers funded by the CyberConnect Foundation. These vouchers will be distributed within two weeks after this announcement. Users can view and claim them via My > Rewards Center.
