Cover Protocol Announces Plans To Compensate Hack Victims

The cryptocurrency industry has been affected by a series of hacks this past year. In most of the attacks, the victimized company usually engages professional investigators to look into the situation and find a better way to compensate victims.

And it seems one of the unfortunate victims, Cover Protocol, has announced a compensation plan to settle users who were affected due to the hack.

According to the announcement, liquidity providers and token holders are also included in the compensation plan. When Cover Protocol was exploited by a white hat hacker, the hacker burnt some of the tokens and sold the remaining portion of the tokens for $3 million. The hacker also returned the generated funds from the sale to the deployer.

But the Cover Protocol said it will be compensating the affected traders based on the Snapchat of block 11541218, which was the current block before the exploitation.

Compensation will be made in ETH and COVER tokens

Liquidity providers who operate on Balancer, SushiSwap, and Uniswap, and are eligible will be compensated with COVER tokens. Also, those who operate on only SushiSwap and Uniswap are entitled to compensation in ETH tokens the white hacker returned. The token holders will receive COVER tokens at a 1:1 ratio according to their wallet balance before the hacking incident occurred.

Cover Protocol also revealed about the tokens deposited in centralized exchanges by the Cover Protocol management team.

The team said the firm is disusing with centralized exchanges to provide a reward for those who had COVER tokens in the balances at the block before the hack.

Binance to compensate users too

Binance is also another firm concerned by the hacking incident on December 28. According to the crypto exchange giant, users whose COVER tokens were rendered worthless after the attack will be reimbursed. According to Binance, the compensation of about $10 million will be paid to the user’s SADU fund in Ether or Binance USD.

Binance said the decision to join in the compensation is based on the fact that not all token holders will be compensated via the existing reimbursement plan by Cover Protocol. Binance reiterated that the exchange wants to see that users are not left empty-handed and left to regret their investments. Therefore, it plans to pay users 2,581 million in ETH and 8.17 million in BUSD.

Apart from the loss of funds by users, the mining attack suffered by Cover Protocol also triggered a price slump. A lot of entities also exploited the vulnerability, with the most notorious being the $4 million withdrawal from the protocol.

After the first attack, CoverProtocol revealed it’s monitoring the addresses of the attackers and other participants in the hacking incident.