Binance, the cryptocurrency exchange giant, is set to compensate traders entangled in the recent whirlwind surrounding the AEUR stablecoin.
The AEUR, designed to mirror the euro’s value, witnessed an unforeseen 200% surge shortly after its listing on Binance.
Initially maintaining stability around $1.08, in line with the EUR-USD exchange rate, the AEUR-USDT pair took a surprising turn around 17:45 UTC, surging sharply to a peak of $3.25.
This deviation from the stablecoin’s intended value is attributed to a misunderstanding among some Binance traders.
A Binance spokesperson explained that there was strong demand for AEUR, which resulted in its price deviation, as users, including those unaware of its stablecoin nature, embraced it.
With a limited liquidity supply of five million on the platform and a zero-fee promotion post-launch, AEUR recorded a significant trading volume of $34 million.
Consequently, Binance promptly suspended spot trading for several AEUR pairs, including AEUR/USDT, BTC/AEUR, ETH/AEUR, and EUR/AEUR.
In response, Binance has introduced a compensation plan for traders who purchased AEUR above its intended value.
Those who bought AEUR between 12:41 p.m. EST and 1:31 p.m. EST on Tuesday without selling on Binance are eligible for compensation.
The compensation process is expected to roll out within the next three days.
While the total compensation amount remains undisclosed, AEUR, issued by Anchored Coins, a Swiss-based entity under Singaporean investor Calvin Cheng, aims to maintain its value backed by euro fiat assets.
The token currently holds a market capitalisation of about $5 million, despite the peculiar surge.
The cause of this surge remains undisclosed, with theories suggesting vulnerability to de-pegging due to the token’s low market cap and limited liquidity.
The token is also currently available on Pancakeswap.