Binance, the world’s leading crypto exchange by trading volume, announced its Secure Asset Fund for Users (SAFU) reached a $1 billion valuation.
The user protection insurance fund was set up in July 2018 to protect users’ interests. Binance committed a portion of the trading fee towards SAFU and began allocating 10% towards the funds. The crypto exchange also revealed the two wallet addresses where the funds are being held in order to ensure transparency. The two wallets contain a billion-dollar worth of crypto in BUSD, BNB and BTC.
Changpeng Zhao, the CEO of Binance, urged other crypto platforms to follow on their footpath and reveal the details of their emergency insurance funds as well. He said, doing so would make them more transparent and also help them showcase their commitment to regulators.
Responding to the queries from Cointelegraph, a Binance spokesperson revealed that the SAFU is meant to protect users’ interests and funds are used at Binance’s discretion. He went on to add that SAFU is focused on, but not limited to Binance.com. He explained:
“The purpose of SAFU is to protect Binance users and we reserve the right to cover issues outside of Binance.com if required.”
In the absence of clear regulations, crypto investors and traders in many countries are solely dependent on crypto exchanges’ security measures to safeguard their funds. However, some of the most notable crypto platforms have been hacked despite the promised security, with millions in user funds getting lost. Thus, the role of user insurance funds becomes very critical.
While decentralized exchanges and protocols have been the primary target of hackers for the ease of heist, however, that doesn’t make centralized exchanges any safer. Earlier this month, one of the Crypto.com suffered a $33 million reported loss after a hacker managed to siphon funds from 483 user accounts. The crypto platform claimed it had compensated users who lost their funds.