Binance Announces $10 Million in COVER Recovery Aid

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In Brief
  • Binance announced on Dec. 30 that it would distribute over $10 million to platform users affected by the COVER hack.

  • On Dec. 28, a hacker launched a minting exploit that created 40 quadrillion COVER tokens.

  • The hacker returned over $3 million to Cover Protocol, but some Binance clients remain affected.

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Binance is giving over $10 million to clients who lost money in the Dec. 28 Cover Protocol contract attack.



Binance released a news item on its website regarding the Incident Resolution Plan for COVER. The coin fell victim to a contract attack on Dec. 28. A mining exploit allowed the hacker to create 40 quadrillion (yes, quadrillion) COVER tokens.

Twitter user @Luciano_vPEPO summed up the attack:



Even though the Cover team saw the $3.2 million in tokens sold, events took a sudden turn hours later. The hacker returned the money.

Cover-ing itself

On Dec. 30, Cover Protocol announced that it would execute a compensation plan. The company wrote that they would take a snapshot of the last block before the attack. All compensation would be based on the state of affairs at that block. Liquidity providers at that time on Uniswap, SushiSwap and Balancer are covered. So are $YETI and $YPIE token holders and all unmigrated SAFE and SAFE2.

Cover will mint new tokens. The company writes that it is working with centralized exchanges to send the new tokens to their wallets. Cover also notes that Binance will use the same block, 11541218, for its own snapshot of COVER ownership.

Binance to the rescue

On Dec. 31, Binance announced on its website its own plan for cleaning up the COVER mess. Binance stated that exchange users who purchased COVER after the hack faced losses that are too big for Cover Protocol to handle on its own. Thus, Binance decided to also pay out over $10 million to compensate clients. 

The exchange also announced that going forward, Cover Protocol’s new token would use the ticker COVER-new. The disbursal of the new token will be followed by an announcement of the fact. After that, users will not be able to withdraw the older COVER tokens.

2020 hindsight

Hacks and exploits are part and parcel of the cryptocurrency world, just as counterfeiting and bank robbing are features of the fiat system. The crypto world has seen its share of malfeasance in 2020, but not all attempts were successful.
For example, hackers attacked the TRON Network at the beginning of November. As BeInCrypto.com reported on Nov. 2. The network upgraded on that day, and developers noticed the attempt to make malicious transactions. Not only were they able to prevent the transactions from completing, they brought the system back online shortly, and thus minimized the disruption while keeping the blockchain intact.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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James Hydzik is a finance and technology writer and editor based in Kyiv, Ukraine. He is especially interested in the development of regulation in the face of increasingly rapid technological change. He previously covered the CEE region for Financial Times banking and FDI magazines. An ardent believer in gut renovating eastern Europe one flat at a time, he currently holds more home renovation gear than crypto.

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