The temporary suspension was due to an alert over “irregular” Syscoin (SYS) trades “from a number of API users.” Binance subsequently chose to suspend trading, withdrawals and other account functions, as well as to take a series of further measures in order to protect its users.
Syscoin for its part notified the public in a tweet yesterday that its developers were investigating a “possible issue” on the Syscoin blockchain, saying that it itself “asked for exchanges to halt trading while [its team] investigate[d].”
It later tweeted that notwithstanding “odd trading behavior” and “atypical blockchain activity,” its investigation suggested that the SYS blockchain was safe, and said it was asking exchanges to reopen SYS trading.
While exact details remain undisclosed, the incident appears to have seen Syscoin trades on Binance rocket to account for over 87 percent of the token’s total trade volumes, becoming the top traded coin on the Binance platform. Binance trading data indicates that at one point, SYS prices on the platform hit a staggering 96 BTC (around $640,000):
Binance SYS/BTC Chart. Source: Binance
In response to the alert, Binance acted to remove all existing API keys and has requested all API users to recreate their API keys — stressing that customers who are not regular API users should not 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 be given a 70-percent rebate on trading fees throughout the same period, paid out in the platform’s native token, Binance Coin (BNB).
Lastly, the incident has prompted Binance to create a ‘Secure Asset Fund for Users’ (SAFU), which as of July 14, will allocate 10 percent 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.
According to Coinmarketcap, Binance is currently the largest crypto exchange in the world with around $1.5 billion in trade volume in the 24 hours to press time.