Global cryptocurrency exchange Binance has announced plans to convert its $1 billion User Protection Fund (SAFU), currently held in stablecoins, into Bitcoin over the next 30 days. This transition will be gradual and accompanied by regular audits to ensure transparency and security. Established in 2018, the SAFU fund serves to protect users against extraordinary events such as hacks or systemic losses. The fund, sourced from a portion of Binance’s trading fees, is kept in cold wallets separate from other user assets. Notably, it was utilized in 2019 to fully compensate users after a security breach that resulted in the theft of approximately 7,000 Bitcoins. Binance further stated that if Bitcoin’s price fluctuations cause the fund’s value to fall below $800 million, it will replenish the fund from its treasury back to $1 billion. This move is part of a long-term strategy to position Bitcoin as the primary reserve asset within the crypto industry rather than just a trading instrument. The announcement comes amid significant Bitcoin price declines and market uncertainty, with Bitcoin dropping below $83,000 and overall market capitalization decreasing. Binance also indicated the possibility of including other core assets, such as its own BNB token, in the fund in the future as part of ongoing efforts to enhance user protection and strengthen the crypto market.
Source: bitcoinmagazine
