In the fast-paced world of cryptocurrencies, the allure of quick riches has unfortunately given rise to fraudulent schemes and rug pulls, leaving unsuspecting investors in despair. One such incident that recently shook the cryptocurrency community was the Xirtam rug pull. However, in a move that underscores their commitment to user security and transparency, Binance, one of the world's largest cryptocurrency exchanges, has stepped in with an innovative solution. Yesterday, Binance announced the creation of an automated smart contract to reimburse users affected by the Xirtam rug pull, marking a significant milestone in the cryptocurrency space.
Meanwhile, data from CoinStats indicated that BNB managed to post a 24-hour gain of 0.56% during the past day of trading, nudging its price to $216 at press time. However, this positive daily movement struggled to pull BNB's weekly performance out of the red zone, as the cryptocurrency remained down by more than 3% over the past seven days.
From a technical standpoint, the price movement of BNB tells a compelling story. A higher low was recorded on its daily chart, resulting in the formation of a positive trend line. Concurrently, the cryptocurrency was making strides in an attempt to break above the 9-day Exponential Moving Average (EMA) line, with the goal of flipping this technical indicator into a support level.
The Xirtam Rug Pull
The Xirtam rug pull, which occurred earlier this year, sent shockwaves throughout the cryptocurrency world. To provide context, Xirtam, based on the Arbitrum network, managed to raise a staggering 1,909 Ether (equivalent to approximately $3.2 million) from user deposits through a series of funding rounds in April this year. These rounds included two direct initial coin offerings (ICOs) and two community sales, facilitated by the Fjord Foundry liquidity bootstrapping pools and SushiSwap liquidity pools.
However, the Xirtam project took a dark turn when a scheduled Xirtam token initial airdrop offering (IAO) was abruptly canceled by the Arbitrum-based decentralized exchange, AlienFi. The reason behind the cancellation was the revelation of an undisclosed Xirtam seed sale, which occurred at a price significantly below the negotiated rate. Shockingly, the IAO was called off just five minutes before it was set to commence, leaving investors bewildered and skeptical.
Shortly after successfully raising capital, the project’s owners executed a rug pull that drained all assets from the Xirtam smart contract, leaving investors in financial ruin. However, what sets this incident apart is the fact that all the stolen funds were directly deposited onto Binance. Remarkably, no mixer or bridging service was used to launder the ill-gotten gains before their deposit onto the exchange.
Binance’s Prompt Action
Understanding the gravity of the situation, Binance promptly took action by freezing the stolen assets on 4 May 2023, assuring affected users that they would work tirelessly to resolve the issue. Their commitment to user security and satisfaction was further demonstrated when they launched an investigation into the Xirtam incident. It was clear that Binance was fully aware of the seriousness of the problem and was determined to find a solution.
In a move that showcases their dedication to rectifying the situation, Binance introduced an automated smart contract to facilitate the reimbursement process for affected users. According to the announcement made yesterday, users who fell victim to the Xirtam rug pull can now reclaim their lost funds. The process is straightforward: users need to connect their wallets to Etherscan, undergo a verification check, and then call the claim function through the contract address. To be eligible for recovery, users must submit their applications by 2 August 2023.
The introduction of this automated smart contract marks a significant milestone in the cryptocurrency space. Furthermore, it underscores Binance's commitment to user protection and security, providing a ray of hope for those who fell victim to fraudulent schemes like the Xirtam rug pull. By leveraging blockchain technology and smart contracts, Binance is not only making the reimbursement process more efficient but also enhancing transparency in the cryptocurrency industry.
The Xirtam incident serves as a stark reminder of the importance of due diligence and caution when investing in cryptocurrencies. While the promise of quick gains can be tempting, it is crucial for investors to conduct thorough research and exercise prudence. Furthermore, this incident highlights the need for regulatory oversight in the cryptocurrency space to protect investors from such fraudulent activities.
In the aftermath of the Xirtam rug pull, the cryptocurrency community witnessed the resilience of exchanges like Binance, which stood up to protect their users. It is a testament to the maturation of the cryptocurrency industry and the growing recognition of the responsibility that comes with being a major player in this space.
As Binance continues to work diligently to resolve the Xirtam issue and reimburse affected users, it sends a powerful message to the cryptocurrency community. The exchange's actions demonstrate that it is not just a platform for trading cryptocurrencies but a responsible and accountable institution that prioritizes user safety and satisfaction.
While the cryptocurrency space has made significant strides in terms of security and transparency, incidents like the Xirtam rug pull remind us that challenges still exist. However, with the commitment of industry leaders like Binance to address and rectify such issues, there is hope that the cryptocurrency space will continue to evolve and mature.
Meanwhile, CoinStats indicated that the native token for the Binance ecosystem, Binance Coin (BNB), was able to print a 24-hour gain of 0.56% throughout the past day of trading. As a result, the utility token was changing hands at $216 at press time. The positive daily movement was not enough, however, to bring BNB’s weekly performance out of the red zone. Consequently, the cryptocurrency’s price was still down more than 3% over the past 7 days.
Price chart for BNB (Source: CoinStats)
Furthermore, BNB was trading closer to its 24-hour high of $216.63, while its daily low sat at $212.68. The altcoin had also outperformed the market leader Bitcoin (BTC) by 0.44% over the past 24 hours. As a result, 1 BNB token was worth approximately 0.00836549 BTC at press time.
Daily chart for BNB/USDT (Source: TradingView)
From a technical perspective, BNB’s price printed a higher low yesterday - resulting in the formation of a positive trend line on its daily chart. Moreover, the cryptocurrency was also attempting to break above the 9-day EMA line to potentially flip the technical indicator into support.
If BNB is able to close today’s daily candle above the 9-day EMA line at around $216.1, then it may attempt to do the same with the 20-day EMA line as well within the following 48 hours. This will also result in BNB’s price overcoming the key price barrier at $220, which will clear a path for it to continue to rise to $230.1 in the next few days.
The bullish thesis will be invalidated, however, if BNB’s price breaks below the positive trend line that had recently formed on its daily chart. In this scenario, the cryptocurrency’s price may lose the support of the $210 mark. Continued sell pressure may lead to BNB retesting the crucial support level at $200 as well.
Disclaimer: Coinpaper does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own research and consult your financial advisor before investing in any digital asset.