‘Unusual But Not a Hack’ — Trading Halted as Syscoin Price Spikes to 96 BTC

Syscoin’s blockchain experienced delays yesterday, coupled with a widely irregular trading activity that took place on Binance — temporarily giving SYS a price of over $640,000 per coin.

Syscoin’s team took precautions to confirm the issues and requested a temporary halt of trading across cryptocurrency exchanges while they investigated. The issues, however, have reportedly been resolved.

Peculiar activity on the Syscoin blockchain took place at block 87670, as more than one billion coins were transferred on the same block. This triggered a red flag of hacking speculations as since the cryptocurrency’s total possibly supply is set to 888 million.

Reports on the issue surfaced after Syscoin’s team came forward with a public statement.

We are investigating a possible issue on the Syscoin blockchain, nothing is confirmed but we have asked for exchanges to halt trading while we investigate.

— Syscoin (@syscoin) July 3, 2018

Bitcoinist reached out to Syscoin co-founder Sebastien DiMichele for clarification on the matter and this is what he had to say:

One Syscoin can be sent several times within the same block(chained to the same transaction); exactly like Bitcoin is designed. The situation that occurred was unusual but not a hack, and no coins were generated outside of the planned mining/masternode/governance schedule.

Put simply, the concentrated block issue was because the majority miners had higher fee policies and the smaller miners picked up transactions when they won a block. We saw hundred of transactions combined to these blocks with higher output values which is why we see totals that are much higher than usual(and even higher than the total coins mined as it was for this case).

Syscoin has since reported that their blockchain is safe and explained that it hasn’t been hacked, debriefing the issue here.

Binance Temporarily Halted Trading

Shortly after the vulnerability was announced, a single SYS coin 00 was traded for 96 BTC 00 on Binance or nearly $640,000 USD.

The price of Syscoin more than doubled in only a few hours, as evident from the below chart, courtesy of CoinMarketCap.

Shortly after the irregular trading took place, the cryptocurrency exchange announced a system maintenance, while halting withdrawals, deposits, and other account functions for the duration. This was followed by an API key reset, due to “irregular trading on some APIs.”

A short while later, the largest cryptocurrency exchange in terms of traded volumes released an incident recap, explaining that all matters associated to the irregular trading activities were resolved.

SYS traders in particular were urged by Binance to open a support ticket.

For the users who were negatively affected by choosing to trade the rising SYS price, Binance will offer zero-fee trading between 2018/07/05 – 2018/07/14. If you traded SYS during the incident and believe you were negatively affected, please open a support ticket.

Binance also introduced the Secure Asset Fund for Users (SAFU), allocating 10 percent of all received trading fees to a dedicated cold wallet to offer further protection to its users.

Syscoin’s price 00 has since been correcting.

What do you think of Syscoin’s abnormal blockchain activity and ridiculously high purchase order? Don’t hesitate to let us know in the comments below! 

Images courtesy of Shutterstock, Twitter/@syscoin, Binance, CoinMarketCap.com.