Binance Will Compensate Cover Finance Hack Victims With $10M

Binance will compensate the Cover Finance hack victims by pledging $10 million that is aimed to help the situation. In our latest Binance news, we are taking a closer look at their decision.

Crypto exchange Binance announced that they will compensate the Cover Finance hack users by pledging $10 million in BUSD and ETH from its SAFU Fund. The exchange also said that it decided whether trading of the COVER tokens will resume in the future. Crypto exchange Binance will compensate the hack victims according to the announcement by giving out $10 million to reimburse the customers:

 “In addition to the compensation plan from the COVER team, Binance will utilize the Binance SAFU Fund to recompense a total of $10,107,505 USD (distributed in 8,171,634.10 BUSD and 2,581.16 ETH) to affected and eligible users.”

Next time, take care of your own shit.@CoverProtocol @chefcoverage https://t.co/ks94ucdoRQ

1. No gains.
2. The Obtained Funds from LP has been returned to COVER.

— Grap.finance (@GrapFinance) December 28, 2020

Cover Finance is a peer-to-peer insurance marketplace that allows users to buy coverage in case another DeFi protocol gets hacked but it ironically fell victim to an infinite minting exploit. With this security hole, the attackers managed to create huge amounts of fake coins and use them to redeem the Cover token which they later dumped on trading platforms. Another Defi project called Grap Finance claimed responsibility for the attack and returned Cover Finance’s funds with a message to the Cover developers to “take care of their own shit.” Cover Finance itself was not affected by the price of the token crashed by almost 100%. Binance CEO Changpeng Zhao said:

 “Short version: COVER smart contract got hacked. A lot of users lost A LOT of money. Project team says they can’t cover the losses. We made a simple decision, we use our funds to cover losses of our users. $10 million bucks. Stay SAFU.”

According to the Binance announcement, the exchange said that a number of its customers purchased COVER tokens right after the proposed snapshot and will be left with worthless assets as a result. The exchange also said that Binance will use its own SAFU fund to compensate the customers:

 “As described in COVER’s compensation plan, the COVER team will take a snapshot of all COVER balances at an Ethereum block height of 11541218 […] and distribute a new COVER token at a ratio of 1 COVER-old = 1 COVER-new. We will also incorporate the time that COVER trading was halted on Binance.”