Binance has announced that its SAFU fund has reached a record of $1 billion in valuation. The fund is for safeguarding users of the platform.
Moreover, the platform aims to increase its level of transparency. This will help Binance meet all regulatory requirements by governments worldwide.
Also, Binance is the largest crypto exchange trading platform globally in terms of the trading volume of cryptocurrencies.
What is Binance SAFU Fund?
SAFU fund is an acronym for Secure Asset Fund For Users. It is an insurance fund of Binance, set up in 2018.
Moreover, the fund aims to protect users in case of an emergency. More specifically, troubles related to hacking of users’ data and accounts.
Additionally, the move to establish the SAFU fund was triggered by irregular trading detected on the platform in 2018.
Hence, the crypto exchange platform decided to give at least 10% of their trading fees to sponsor the fund. Furthermore, the company adds that all the funds would be stored in a separate cold wallet.
The company mentions the wallet addresses of the funds as well. Additionally, this is to improve the transparency of the platform.
According to Binance, they have already used the SAFU fund to reimburse investors who were hacked on the platform.
The CEO of Binance said that initiatives like SAFU Fund show their commitment to follow regulation rules. Furthermore, Chanpeng Zhao said that other crypto platforms should also follow in their footsteps.
Additionally, Zhao says that this will help crypto platforms be more transparent and secure.
A Move In The Right Direction
As we know, cryptocurrency is an unregulated asset. Governments of the world cannot protect investors in cases of crypto hacks.
Hence, investors have no choice but to rely on crypto exchange platforms to safeguard their funds. However, most crypto exchange platforms have not been able to protect users.
The past few years have seen an increase in the rate of crypto-related crimes. When it comes to taking responsibility for hacks, crypto platforms usually shift the weight on users.
“If you have a problem, then solve it” is the ideology of many platforms. However, Binance’s decision to safeguard their investors is a move in the right direction.
Accordingly, the platform has reimbursed many hacked victims in the past. For instance, in December 2021, the fund was used to compensate the Cover finance infinite minting hack victims.