An accounting error at Binance resulted in a jackpot for some users in Helium Network’s native HNT coin and left the largest cryptocurrency exchange in the world with a multimillion-dollar deficit.
According to the report, the top exchange has lost close to 5 million HNT tokens that were mistakenly distributed to users, many of whom sold the tokens for a profit right away. These assets had a value of nearly $19 million on 16th Sept.
The main culprit behind the incorrect payout has been Binance’s tracking of token deposits from the well-known decentralized internet connectivity project Helium network, sources close to the matter said.
For those new, Helium is a decentralized wireless network for “internet of things” devices, powered by cryptocurrency.
The network utilized two types of tokens: the native HNT token, which Helium pays to hotspot hosts, and the MOBILE token, used as a payment to operators of its 5G infrastructure, launched last month and doesn’t have a liquid market or quotable price.
Binance Miscounted The Tokens
The two tokens, like the ERC-20 and ether [ETH] tokens on Ethereum, are independent assets even though they are closely related. They were wrongly counted as one by Binance: HNT. Depositors received an equivalent amount of the more valuable HNT when they sent MOBILE to Binance addresses.
However, not until 4.8 million HNT tokens were sent in place of MOBILE before the error was fixed. The timing of the unexpected windfall matches a big sell-off of HNT tokens, which sent the price of the asset down from around $7 to where it is now, around $4.
“The Helium Foundation was informed by Binance late in the evening [ET] on Sept. 15 that an accounting error involving HNT had occurred,” a spokesman of the project said.
“We can confirm that this is not a chain issue and that this issue is isolated to Binance. To our knowledge, no other exchanges or third parties have been affected. We advise token holders to suspend HNT and MOBILE deposits on the exchange until a comprehensive situation update is provided.”
As previously reported by TronWeekly, Helium developers proposed migrating to the Solana blockchain to fix the scaling woes.