The repercussions of a hacking attack on the cryptocurrency world can be severe not only for victims but also for the platform itself that failed to secure the assets. Cypher, based on the Solana blockchain, faces the challenge, aiming to compensate its users for their losses. What steps is the company taking to make this possible?
The end of August 2023 brought important news for Cypher users, a digital asset exchange based on Solana technology. The company announced plans for the “fairest” token offering in the platform’s history. As stated by Cypher, funds raised from this offering will be allocated to support the protocol development, conduct audits before its relaunch, and establish a treasury for the protocol.
All of this was a response to the August attack on the platform. On August 7, the platform was attacked, resulting in losses for many users. In response to this incident, the Cypher team decided to launch a special token offering. Before its commencement, users were given the option to exchange their assets according to a prior compensation plan.
Readers might ask, what exactly does such an action mean for the average platform user? In short, funds raised from the token offering will support Cypher’s further development so that it can continue to operate as a secure and trustworthy place for cryptocurrency trading. Moreover, those affected by the breach will receive special debt tokens as a form of compensation.
Unfortunately, the breach resulted in the theft of a substantial number of assets. This was over 15,400 SOL and almost 150,000 USDC stablecoins. Although many of these funds were recovered through collaboration with centralized exchanges, remaining assets worth $600,000 are still frozen and awaiting legal decisions.
The Cypher team also decided to share information on how the new tokens will be allocated. According to the data shared, the broader community will receive 45.5% of all tokens. Meanwhile, the team and investors will receive 23% and 10.9% respectively. Advisors will be rewarded with only 1.2% of the pool.
Attacks on cryptocurrency platforms are unfortunately inevitable in the rapidly evolving world of blockchain technology. However, how a company responds to such challenges speaks volumes about its long-term vision and responsibility towards its community. Cypher, through its decisions, demonstrates determination in compensating its users for their losses and rebuilding trust.
Photo by John Schnobrich on Unsplash
