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Binance announces $10 Million for COVER recovery

Binance announces $10 Million for COVER recovery

 According to the recent announcement, Binance plans to compensate users who lost money in an attack on the DeFi Project, Cover Protocol. The Cover protocol underwent an attack on Dec.28. The hacker successfully generated the project’s native COVER token and swapped those tokens for ETH, WBTC, and DAI.

Via the attack, the hacker was capable of stealing $4 million worth of crypto through swapping. Moreover, the attackers succeeded to instantly generate a vast amount of fake tokens and employ them to reform Cover’s tokens, which they later dropped on exchanges. As a result, COVER’s market value cascaded from $10.77 to $4.66 in a few hours. Binance was among the exchanges that suspended trading in response to the attack. Thus, contributing to the token’s declining value.

Cover Protocol introduces a compensation plan.

After the attack, the Cover protocol announced a compensation plan. The company stated that they would capture a screenshot of the last block before the attack. It says that liquidity providers at that time on Uniswap, SushiSwap, and Balancer are covered. Moreover, $YETI and $YPIE token holders and others did not migrate SAFE and SAFE2. Cover will issue new tokens. The company addresses that it is operating with centralized exchanges to transfer the new tokens to their wallets. Cover also advocates that Binance will apply the same block, 11541218, for its snapshot of COVER ownership.

On Dec. 31, Binance declared on its website its plan covering the losses of the Cover protocol. Binance said that exchange users who bought COVER after the hack suffered heavy losses, which is difficult for Cover Protocol to manage. Binance has declared plans to offer $10 million to users who possess the project’s COVER token on its exchange. Moreover, it will issue $10 million in Ethereum (ETH) and Binance Coin (BUSD). 

The investors will receive compensation via Binance’s SAFU Fund. This fund came into existence to cover Binance’s May 2019 attack, in which the exchange lost $40 million of bitcoin. The exchange states that in the future, Cover Protocol’s new token would utilize the ticker COVER-new. Notwithstanding, Binance’s generous compensation, no update about the Cover Protocol’s security is available. However, Cover Protocol will issue additional data in the future as it moves to a more secure system.

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