Binance announced that it will change the SAFU fund to USDC! Contains BNB, BTC, USDT and TUSD

Binance established the User Asset Security Fund (SAFU) in July 2018 to provide compensation protection in the event of user asset losses due to extreme conditions or security issues. investor interests. Since the establishment of the fund, Binance has promised to invest a certain proportion of transaction fees to increase the scale of the fund and protect users.

Binance issued an updated announcement on SAFU today (18th) stating that over the years, Binance has been monitoring the size of the SAFU fund to keep its balance at a level sufficient to protect the safety of user funds. The size of SAFU will fluctuate, but usually remains at the $1 billion level.

Binance announced that it will change the SAFU fund to USDC

Binance mentioned that the SAFU fund is the core part of Binance’s responsibility for its ecosystem, and Binance is also constantly developing to respond to the market situation. Now Binance has decided to convert 100% of SAFU’s assets into USDC and manage the SAFU fund through the use of trusted, audited and transparent stablecoins to further enhance its reliability and ensure that the fund size remains at a stable level of US$1 billion. .

In fact, Binance’s SAFU fund assets have caused controversy many times before.

In 2022, the SAFU Fund’s asset portfolio of US$1 billion is BUSD, BNB and BTC, of ​​which BNB accounts for 44%, BUSD accounts for 32%, and BTC accounts for 24%. Since the assets are mainly composed of the platform currency BNB , after the FTX thunder, the SAFU fund was criticized by the outside world as if FTX filled the fund with FTT, which poses huge risks.

In March 2023, the stablecoin BUSD jointly issued by Binance and Paxos was targeted by U.S. regulatory agencies. Paxos announced that it would stop cooperating with Binance and stop minting BUSD. Binance immediately issued a statement that it would All BUSD balances in the SAFU fund are replaced with TUSD and USDT to continue to protect users.

Since then, SAFU mainly holds BTC, BNB, USDT and TUSD assets. After Binance’s announcement, according to on-chain data tracking data, Binance deposited 16,277 BTC (approximately $1 billion) and 1.36 million BNB (approximately $750 million) into hot wallets, and deposited 1 billion USDC into SAFU Wallet address.

Although the volatility of USDC is very low, some netizens speculate whether it is because Binance is worried that the market high has reached a high point, and is afraid of high losses and will exchange BTC and BNB for stable coins?

Since Binance remits a large amount of BTC and BNB to the official hot wallet, it is unknown whether they have sold them; perhaps they just want to strengthen the exchange's asset reserves.

USDC is more secure?

In the stablecoin market, USDT issued by Tether has relied on its first-mover advantage. Its market value has so far approached US$110 billion, firmly ranking as the leader in the market value of stablecoins. However, its account has many problems such as opaque funds and mortgage rates. The market has questioned it many times in the past.

After BUSD was cracked down by regulators, TUSD suddenly emerged and became the darling of Binance last year, with a significant increase in market share. However, subsequent factors such as decoupling and close relationship with TRON founder Justin Sun led to trust. Due to the crisis, TUSD’s market value has plummeted from US$3.5 billion at its peak in September last year to the current US$500 million.

In comparison, USDC’s compliance still seems to be favored by the outside world. In a report in February this year, J.P. Morgan analysts warned that USDT poses risks to the overall currency market and stated that they were more cautious about USDC. It is optimistic that Circle, the USDC issuer, has recently secretly applied for a public listing in the United States. This move demonstrates the company’s plans for international expansion and is actively preparing for the upcoming stablecoin regulations.

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