Binance has topped up an emergency fund designed to protect users following pronounced volatility in crypto markets triggered by the exchange giant's dispute with — and subsequent surprise rescue deal for — rival FTX.
Changpeng Zhao, CEO of Binance, said in a tweet that the exchange had added funds to its Secure Asset Fund for Users (SAFU) “to adjust to recent price fluctuations,” and to ensure that it again contains $1 billion worth of crypto.
Binance moved 194,500 BNB ($62 million) and 8,325 BTC ($153 million) into the SAFU fund, according to The Block Research’s analysis — a deposit of $215 million in total. A Binance spokesperson had declined to specify the size of the top-up, but Zhao said in his tweet that SAFU's BNB balance had been brought to over $700 million and its bitcoin balance to $300 million.
The exchange operator describes SAFU, which it set up in 2018, as “an emergency insurance fund” to which it sends a percentage of trading fees. As of Jan. 29 this year, the fund — which is comprised of BNB, BUSD and bitcoin — contained roughly $1 billion.
It appears, however, that turbulence in crypto markets — bitcoin and ether are down 6% and 12%, respectively, in the past 24 hours — decreased the size of backstop. The declines have been brought on chiefly by the stunning news, announced Tuesday, that Binance had agreed to acquire FTX after the exchange founded by Sam Bankman-Fried halted withdrawals.
As the drama unfolded, Zhao continued to post on social media. In one tweet, he opined that “all crypto exchange should do merkle-tree proof-of-reserves,” and said that Binance would start offering that kind of transparency soon.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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