Binance’s official blog reads: the Secure Asset Fund for Users (SAFU) has been increased to $1 billion, according to the latest statements.
The SAFU is an emergency insurance fund established in 2018 by Binance, whose CEO is Changpeng Zhao, to protect users in extreme market situations. Indeed, over the years, Binance has continued to monitor the size of the SAFU, keeping the balance at an appropriate level to safeguard its users.
Trust, integrity and transparency: the goals of Binance’s SAFU
As early as January 2022, Binance stated that SAFU was worth $1 billion. However, due to recent market conditions, that value is now $735 million, as can be verified on Binance’s official website.
Where it clearly states that both portfolios contain a combination of BUSD, BNB and BTC.
Following the recent FTX exchange disaster and subsequent critical market situations, Binance recently brought SAFU’s balance back to $1 billion. The official website of one of the largest crypto exchanges reads:
“We promised our users, along with the broader crypto ecosystem, that SAFU would always maintain a considerable level. We will continue to deliver on this promise and continue to build.”
In any case, in addition to protecting users’ interests, SAFU’s definition also includes three essential components for mass adoption: trust, integrity and transparency. This is to ensure that traders and retail investors continue to place a significant level of trust in centralized crypto exchanges.
Binance calls on other exchanges to do the same. Namely: publish the addresses of their insurance portfolios. This because users deserve and need to know if they are transferring their hard-earned money to a platform that employs proper security measures and is completely transparent with users’ funds.
Why is Binance’s SAFU so important?
The SAFU fund established by Binance is synonymous with security, this ensures that investors already active in the exchange continue to feel protected even in adverse market conditions and that, potential new traders, can approach the crypto world in a more assertive way.
Indeed, when users deposit their money on the Binance platform to use its products, they can be assured that the platform is fiscally responsible for those funds. Binance is not and has never acted like an investment company or hedge fund.
The community itself has asked for it: the industry must go above and beyond. And Binance promptly responded to the requests, stating:
“It is our responsibility, as a collective, to ensure that users feel comfortable in the cryptocurrency ecosystem. Robust cybersecurity measures are only part of the equation; the other part is a safety net capable of mitigating damage in an emergency as much as possible.”
Binance also promises that in the future SAFU will continue to be a key part of their responsibility to the ecosystem and will continue to evolve to address market conditions, whatever they may be.
Not only Binance, Tron also tries to solve FTX’s problems
In these complicated market days, it wasn’t only Binance that tried to extend a hand to FTX following the disastrous crash it suffered (FTT down 85% to below $3).
Indeed, Justin Sun, the founder of the Tron blockchain, had also stated in recent days that he would work on a solution with FTX to try to solve the exchange’s liquidity crisis.
It was already rumored on Twitter that Sun’s intention to support all Tron token holders on FTX and put together a solution with FTX to hopefully improve the condition of the exchange.
However, until yesterday, there was no precise news or explanation as to what solutions Tron would adopt to protect the platform. It was only stated in other previous tweets that Sun was intent on protecting Tron users with locked funds on FTX by supporting them to redeem their deposited Tron tokens on the FTX platform at a 1:1 ratio.
In recent hours, this intention has become a reality, as Watcher.Guru announced on Twitter:
JUST IN: FTX reaches agreement with Tron, allowing TRX, BTT, JST, SUN, & HT holders to swap assets from FTX 1:1 to external wallets.
— Watcher.Guru (@WatcherGuru) November 10, 2022
“JUST IN: FTX reaches agreement with Tron, allowing TRX, BTT, JST, SUN, & HT holders to swap assets from FTX 1:1 to external wallets.”
Hence, withdrawals on the troubled exchange may soon be facilitated for all users. Deposits will depend on factors including withdrawal demand and Tron’s funding capacity.
The exact figures for future capital injections will be determined on a weekly basis, and each week those injections are to take place at 2:00 PM UTC (9:00 AM EST), Tron stated following the agreement.
In addition, FTX said it will disable Tron deposits for all users for the duration of the injections, binding future token deposits to the Tron team itself. FTX’s statement following the agreement was the following:
“By providing a predetermined schedule of the amount of tokens to be placed in the market and the corresponding time, our goal is to provide greater clarity to the market by allowing users to make more informed decisions. As such, enabled markets may experience high levels of volatility.”
FTX has also asked users to make sure they understand the agreement with Tron and the ramifications of any associated risks before trading.
So, will Tron really be the true savior of FTX? Or should we expect more twists and turns like those that have already happened with Binance?