Binance restores service after alert triggers suspension

July 04, 2018
Chris Wheal

Binance services were suspended for 12 hours, triggered by a security alert: Shutterstock

Binance has resumed services after a 12-hour temporary suspension of all trading and withdrawals, triggered by an alert over “irregular” Syscoin (SYS) trades “from a number of API users.”

Trading bot activity spiked and 1 SYS ($0.22 at the time) sold for 96 bitcoin (BTC) – equivalent to about $640,000.

The world’s biggest crypto exchange decided to suspend trading, withdrawals and other account functions, as well as to take a series of further measures in order to protect its users. As most traders were unaware of what happened, the buy order led to a price rally for SYS.

Brief sharp price rally for SYS

A short-lived sharp rally for SYS: Cryptoslate

Syscoin notified the public via a tweet that its developers were investigating a “possible issue” on the Syscoin blockchain and that it had “asked for exchanges to halt trading while [its team] investigate.”

It later tweeted that despite “odd trading behaviour” and “atypical blockchain activity,” its investigation suggested that the SYS blockchain was safe, and it was asking exchanges to reopen SYS trading.

While exact details remain undisclosed, the incident appears to have seen Syscoin trades on Binance soar to account for over 87% of the token’s total trade volumes, becoming the top-traded coin on the Binance platform.

Binance response

Binance responded to the alert by removing all existing API keys and requested all API users to recreate their API keys. However, it requested that customers who are not regular API users not to create an API key for the time being.

The exchange also says it has rolled back all the irregular trades, and offers anyone who was negatively affected by trading during the rising SYS prices a zero-free trading regime from July 5 through July 14.

All other Binance users will receive a 70% rebate on trading fees over the same 10-day period, paid out in the platform’s native token, Binance Coin (BNB).

The incident has prompted Binance to create a ‘Secure Asset Fund for Users’ (SAFU), which as of July 14, will allocate 10% of all trading fees received into the fund “to offer protection to users and their funds in extreme cases.” Binance says that it will use segregated cold wallet storage for all SAFU funds.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

Related News

OL DEX is closing all activities April 25, 2020
USDT (ERC-20) Gateway Enabled April 17, 2020