Crypto Exchange Binance Raises Its SAFU Fund To $1B Amid Price Swings
Recently, the crypto market has gotten into a tight tunnel as prices keep decreasing. Most crypto assets are moving to the south with little or no break. The bears are becoming too intense, and tension keeps increasing in the market.
The fluctuations have triggered the leading crypto exchange Binance, to pursue sustainability. This new action came after the exchange announced its intent to acquire the FTX to ease its liquidity issues.
The CEO of Binance, Changpeng Zhao (CZ), has actively noted the events in the Binance-FTX drama. Also, he took to Twitter to disclose some points regarding the drama.
In a tweet today, CZ revealed that his firm made more funding on its insurance backing. According to the post, Binance increased its Security Asset Fund for Users (SAFU) to $1 billion equivalent.
CZ reported that the move ensures the network’s safety against the market’s recent price fluctuation. In addition, the aim is to protect users by ensuring continuing operations regardless of market trends.
Details Of Binance’s SAFU
Further, the Binance CEO mentioned the detail of the two reserve accounts and their links. One of the accounts holds Binance Coin (BNB) token and the Binance stablecoin (BUSD) worth about $700 million. The second account comprises Bitcoin (BTC) tokens worth about $300 million.
Reacting to the Twitter post, some people from the crypto community made their positions known to the CEO. Some applauded his initiative and unique leadership vision for the network’s security.
One of the users mentioned that all crypto companies should emulate Binance to have a Security Asset Fund for Users (SAFU). However, some still question the fund’s reserve cap adequacy for users.
In 2018, the Binance SAFU kicked off with a fund dedicated to backing up user holdings in critical situations. Further, the firm allocated 10% of the trading fee to the fund. Gradually, the fund kept growing and hit $1 billion for the first time in February this year.
CZ Maintains Transparency In The Crypto Firm
The CEO of Binance has maintained a transparent position in handling almost all the firm’s events. CZ stated that the company would deploy a system of Proof-of-Reserve using Merkle Trees.
The aim is to achieve full transparency with the community. In addition, Merkle Trees enable the encoding of blockchain data through a more secure and efficient method.
Hence, reactions on the sufficiency of Binance’s SAFU are emerging after CZ tweeted on the use of Proof-of-Reserve the previous day. The CEO mentioned that the mechanism would provide detailed information on liquidity for the network.Source