Binance Enhances Security: $1B SAFU Fund Converted to USDC for Stability

• Binance has announced that it will convert its $1 billion Secure Asset Fund for Users (SAFU) into USDC, which amounts to around 3% of the stablecoin’s overall circulating supply.
• On-chain data shows that the SAFU wallet converted 1.36 million BNB to $750 million worth of USDC, as well as 16,277 BTC, worth over a billion dollars.

Binance, the world’s largest crypto exchange, has converted all the assets in its SAFU fund to USD Coin (USDC), the second-largest stablecoin in the market.

SAFU, known in full as the Secure Asset Fund for Users, was established in 2018 as emergency insurance for traders. It guarantees that the exchange will be able to cover their positions if an unfortunate incident, like a hack, occurs.

The goal with SAFU has always been to maintain it at $1 billion, and while Binance acknowledged that this figure has fluctuated for short periods over the years, it said that it takes quick measures to remedy any changes.

And now, the exchange is converting all the BNB and BTC held in SAFU to USDC, the second-most popular stablecoin after Tether.

Today, all SAFU assets will be converted to $USDC, bolstering reliability and stability at $1bn.

Read more https://t.co/Dggl3CdQYU

— Binance (@binance) April 18, 2024

The decision was part of Binance’s goal to evolve in its response to market needs, the exchange wrote in an accompanying blog post, adding:

Today, we are transferring 100% of SAFU’s assets to USDC. Making use of a trusted, audited, and transparent stablecoin for SAFU further enhances its reliability and ensures it remains stable at $1B.

The exchange also provided the address where it will hold its USDC as 0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa.

Binance’s SAFU Evolves

Previously, Binance held its SAFU assets in BNB and Bitcoin. The former is the native token of the Binance-founded BNB Smart Chain, while the latter is the largest crypto in the market.

However, while BNB and BTC are two of the most recognized cryptos, they have significant downsides in a volatile market which changes overnight. For instance, BTC has lost 7.96% since the month started and trades just below $65,000 at press time. BNB, on the other hand, has shed 5% to trade at $573.

However, while the risk was heightened with BNB and BTC, so was the upside. For instance, since 2018, when Binance established SAFU, BNB has shot up from an average of $13 to trade at $573, a 4,307% surge. On the other hand, the highest Bitcoin price in 2018 was around $15,000. It now trades over four times higher.

As some noted on social media, the move to USDC could just be Binance taking profits from the two assets. After all, while only $800 million was transferred into the new SAFU wallet address, the exchange transferred out just over $1 billion in BTC and $740 million in BNB. To further illustrate that it was a profit-taking move, another blockchain sleuth noted that the BTC that Binance moved from its SAFU address went to a hot wallet, indicating it intends to sell it soon.

in a 2022 blog post, binance noted $1bn assets in the safu fund

recent price increases had significantly increased the value of these holdings. seems like binance pocketed a small gain for itself

transfer in: 800m USDC
transfer out (volatile assets): $1bn in BTC, $740m in BNB pic.twitter.com/yAC9RjaL6l

— tmnxeq (@tmnxeq) April 18, 2024