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Binance Publishes Apology Letter to Steemit Community and Says It Has ‘Unvoted’

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Cryptocurrency exchange Binance has officially apologized to the Steemit community following its involvement in a major centralization scandal involving Tron founder Justin Sun.

Cryptocurrency exchange Binance has officially apologized to the Steemit community following its involvement in a major centralization scandal involving Tron founder Justin Sun.

In its letter posted on March 10, Binance affirmed that it “stays neutral and has no interest in on-chain governance beyond the Binance ecosystem.”

Binance also provided records of its powering down of all the 31,730,000 STEEM tokens it had staked in support of Justin Tron’s allegedly “hostile takeover” of the blockchain.

Steemit vs. Tron controversy: the backstory

Binance’s letter comes following a stand-off earlier this month between members of the Steemit community and Tron CEO Justin Sun, who acquired — or “strategically partnered with,” as it was later presented  — Steemit in February of this year.

Steemit is a blockchain-powered version of a Reddit-like social media platform, which uses a consensus mechanism called delegated proof-of-stake. This protocol means that the blockchain is governed by a set number of “witnesses,” elected by STEEM holders, whose voting influence is proportional to the number of tokens they hold.

Following news of Sun’s apparent acquisition, the Steemit community orchestrated what it called coordinated and preemptive “due diligence” to soft fork the blockchain in order to deactivate a major stake — known as the “ninja-mined stake” — which had hitherto been owned by Steemit.

The ninja-mined stake comprised roughly 74 million tokens and the community feared that Sun would be in a position to wield excessive control over the platform if he were to able to dispense of the voting rights attached to a stake of this size.

Sun responded to the soft fork by controversially declaring it to be a “criminal” action by “malicious hackers” and enlisted three exchanges — Binance, Huobi and Tron-owned Poloniex — to vote the STEEM tokens deposited by their own users to vote for a hard fork that would reverse the community’s action.

The letter

In the furor that followed, Binance’s CEO Changpeng Zhao has since claimed that Binance believed it was staking the tokens in favor of a regular upgrade/hard fork. In today’s letter, the exchange upholds this line:

“We hold a supportive position of normal upgrade/hard fork and will continue to do so in the future.”

In addition to providing evidence that it has now “powered down” all of the voted tokens — on March 8 and 9 respectively — Binance wrote:

“Hopefully, the Steemit community and TRON will reach a consensus in an efficient manner. If they fail to reach an agreement and it poses potential risks/damages to STEEM users on Binance, we reserve the right to take corresponding actions at the consent of our users.”

Binance did not immediately respond to Cointelegraph’s request for comment. This article will be updated should they respond.

Huobi has also announced that it removed its vote, whereas Tron-affiliated Poloniex is yet to comment on the incident.

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