Binance has increased its insurance fund for users to $1 billion valuation. Leading cryptocurrency exchange Binance today announced it has increased its user insurance fund dubbed “Secure Asset Fund for Users (SAFU)” to a $1 billion valuation.
The SAFU is an in-house emergency insurance fund launched by Binance in July 2018. When the fund was launched, Binance reportedly began allocating 10% of all trading fees. The fund ensures that users will be fully compensated if a security breach leads to the loss of funds deposited on the platform.
According to the information, released by Binance today, the SAFU fund Bitcoin address currently holds 7,952 bitcoins (worth approximately $300 million), while the other wallet on the Binance Smart Chain network holds BNB (worth approximately $400 million) and BUSD tokens ($300 million).
Binance urged other centralized exchanges to “publish their insurance fund wallet addresses, as it will benefit the entire ecosystem.” and to show the government and regulators their commitment and effort towards protecting investors.
Following the announcement, Binance noted that it will continue to observe the size of the fund to make sure it “remains adequate to protect users’ interests.”
Notably, the Binance SAFU fund was last used in May 2019 when the exchange lost 7000 BTC (the equivalent of $40 million at the time) in a large-scale security breach. Since then, Binance has not reported any major security incidents.
Fast forward to the present, however, the industry is witnessing a significant increase in security breaches, leading to huge amounts of losses in investors’ funds. In 2021, crypto users lost over $7.7 billion to criminals, representing an 81% increase from 2020.
Last week, major competitor Crypto.com suffered a security breach that led to the loss of $34 million worth of crypto assets, although the platform reimbursed affected users.
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