TL; DR Breakdown
- Binance announces $1 billion milestone of SAFU fund
- The exchange stores the fund in an offline wallet
- Binance has made use of the fund in the past
Binance has been having a not-so-good time in the market in the last few days due to so many issues bordering on regulations. Even though it is one of the most popular exchanges, regulators across the world limit their operations in their respective countries. However, the firm has released a new update much to the happiness of its users across the world. In its new update, the crypto exchange announced that its SAFU fund has touched close to $1 billion.
The funds are stored in an offline wallet
The Secure Asset Fund for Users is a special fund set aside for users that suffer from hacks and scams on the platform. The crypto exchange also made two wallet addresses where these funds were located available to the public. With these, anybody can check the movement as well as the the activities behind these funds. Going by this recent update, market participants have mentioned that it goes to show how transparent the company is regarding the fund.
Binance has also urged other crypto exchanges to follow in its stead and set up their SAFU fund. In its statement, Binance advised exchanges to publish their insurance wallets so everyone can track its movement. Going further, the exchange says it will show regulators and governments how transparent and trustworthy the crypto sector can be.
Binance has tapped the SAFU fund in the past
The crypto exchange set up the Secure Asset Fund for Users in 2018 after a series of issues related to the trading platform. During the period, Binance suffered from massive outages which was a source of concern from traders and stakeholders alike. Although the company says the platform is secured against a potential hack, the fund was set up to compensate users in the event of one. During the period, Binance announced that about 10% of all trading fees from transactions would be forwarded into the said fund.
In further making sure that the wallet stays secure, the exchange made sure it used an offline wallet to store the funds. Binance has also touched the SAFU fund in the past after the platform was breached by hackers where they carried away 7074 Bitcoin in May 2018. At the period, Changpeng Zhao wanted to reorganize the Bitcoin chain but eventually backed out of the decision. The exchange also used the fund to compensate investors who suffered from the Cover Finance hack in December.