By
Temitope Olatunji
May 14th, 2024
Binance clarified that only participants of the official XIRTAM token sale, public and private are eligible for a refund, thus leaving exchange buyers exposed.
The leading cryptocurrency exchange Binance has announced plans to refund victims of an early rug pull on a project named XIRTAM. According to the announcement, Binance plans to distribute about 1,909 Ethers that were intercepted as the XIRTAM team attempted to liquidate the assets on the exchange. With the funds frozen on the Binance exchange, the company highlighted that its security team is assessing the project’s on-chain activities in a bid to establish the affected victims.
Currently, the Binance security team has identified over 1,750 victim addresses, who are thought to have participated in the early token sales. Meanwhile, Binance highlighted that XIRTAM victims who invested in the project through the secondary market are not covered by its refund program.
“If you purchased XIRTAM on the secondary market, or through a third party, we cannot guarantee a refund for you at this time, as we are not in possession of the funds that you paid for the XIRTAM token sale. If you did participate in an official token sale, and the guide indicates that you are not eligible for a refund, we may be still reviewing your activity,” the exchange noted.
Nonetheless, Binance indicated that it holds the right to determine the refund process and claim eligibility in a bid to eliminate chaos.
#Binance opens XIRTAM refund claims for victims.
Our security team worked diligently to analyze the project’s activities and identify victims and launched the recovery process for over 1,750 victim addresses today.
Read more here ⤵️https://t.co/T23pc4xhwe
— Binance (@binance) September 7, 2023
What the Binance XIRTAM Refund Means to Crypto Investors
The actions of Binance on the XIRTAM refund program can closely be associated with the recent SEC vs. Ripple summary Judgment on XRP sales. Notably, Judge Analisa Torres ruled that the XRP sales to institutional investors constitute investment contracts, thus deemed securities. However, the Judge ruled that the XRP sales on secondary markets through exchanges do not constitute investment contracts, thus not securities. Moreover, the Judge argued that Ripple had no idea who purchased XRP on the secondary markets.
Forward, it is prudent for crypto investors to understand that the sales on exchanges are not protected by law in any jurisdiction. Nonetheless, most cryptocurrency exchanges have put in place measures to combat money laundering, especially from addresses flagged to be from attackers. However, the risk of investors being rekt through dubious crypto startups is still high. Moreover, Bitcoin creator, Satoshi Nakamoto, had predicted some level of fraud would exist as the market matures.
“Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable,” the Bitcoin whitepaper reads.
Nonetheless, Binance continues to reassure its customers of its neutrality despite heightened regulatory scrutiny, especially in the United States.