Binance Introduces Smart Contract Solution to Compensate Users Hit by $3M Rug Pull

In a move to address the fallout from the Xirtam rug pull, leading cryptocurrency exchange Binance has taken a proactive step by deploying an automated smart contract designed to reimburse affected users.

The announcement, made on September 6, revealed that individuals impacted by the Xirtam rug pull can reclaim their funds through a straightforward process. Users are required to link their wallets to Etherscan, complete a verification procedure, and execute a claim function using the provided contract address. It’s important to note that applicants had until August 2 to submit their claims to be eligible for recovery.

Binance was quick to acknowledge the gravity of the Xirtam incident, stating, “We have received several reports of XIRTAM incidents and are fully aware of the seriousness of the problem.” The exchange promptly initiated an investigation and took immediate action, freezing the suspected fraudulent funds within their platform. The statement concluded with a note of appreciation for users’ patience and understanding as the issue is resolved.

Xirtam, an Arbitrum-based project, managed to amass approximately 1,909 Ether, equivalent to $3.2 million, through user deposits during funding rounds in April. These rounds comprised two direct initial coin offerings (ICOs) and two community sales conducted via Fjord Foundry liquidity bootstrapping pools and SushiSwap liquidity pools.

Notably, one of these instances witnessed the cancellation of a scheduled Xirtam token initial airdrop offering (IAO) by Arbitrum-based decentralized exchange (DEX) AlienFi. The cancellation occurred just five minutes before the IAO was set to commence, as AlienFi discovered an undisclosed Xirtam seed sale taking place well below the agreed-upon price.

Following the successful capital raise, the project’s creators executed a rug pull, swiftly draining all assets from the Xirtam smart contract. Intriguingly, all these misappropriated funds were directly funneled into Binance, prompting the exchange to freeze the illicitly acquired assets on May 4. Notably, there was no employment of mixers or bridging services to obscure the funds’ origin before their deposit onto Binance’s platform.

The innovative smart contract introduced by Binance marks a significant effort to alleviate the losses experienced by victims of the Xirtam rug pull, showcasing the cryptocurrency industry’s continuous commitment to addressing issues of fraud and security within the ecosystem.

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