Binance to convert $1B SAFU reserves into Bitcoin within 30 days

Binance is shifting its flagship idiosyncratic extortion vehicle, the Secure Asset Fund for Users (SAFU), from stablecoin holdings into Bitcoin implicit the adjacent 30 days, re‑denominating the fund’s reserves into BTC.

In an unfastened letter to the crypto community, the speech framed the determination arsenic an look of its condemnation that Bitcoin (BTC) is the halfway long‑term plus of the crypto ecosystem alternatively than conscionable different trading product, and says it volition rebalance the money backmost up to $1 cardinal if marketplace volatility drives its worth beneath $800 million. 

That determination efficaciously makes the money much exposed to Bitcoin terms swings, raising questions astir whether a sharp BTC drawdown could weaken the buffer precisely erstwhile a large information oregon insolvency lawsuit mightiness necessitate accelerated payouts.

A spokesperson from Binance told Cointelegraph that the speech would basal by the manufacture “through marketplace cycles and uncertainty,” proceed investing resources successful the broader ecosystem, and would see allocations of “core assets,” specified arsenic BNB, successful its adjacent review. 

The spokesperson said that Binance would “use our treasury reserves” to apical up the SAFU money if it dipped beneath $800 million.

Protecting users successful “extreme” cases

SAFU, launched successful 2018, is funded by a portion of Binance trading fees and is designed arsenic an exigency cookware to reimburse users successful “extreme” cases specified arsenic hacks oregon captious level failures. 

The spokesperson said that the types of losses covered by SAFU “may see losses sustained by users successful the uncommon lawsuit of a level information oregon different incident.”

Open missive to the crypto community. Source: Binance

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In May 2019, for example, erstwhile hackers stole astir 7,000 BTC (about $40 cardinal astatine the time), affected customers were made whole utilizing SAFU, with Binance stating that nary idiosyncratic balances were reduced. 

The speech has since promoted SAFU arsenic a halfway pillar of its spot and hazard absorption story, noting successful caller communications that it holds idiosyncratic assets afloat backed connected a 1:1 ground and maintains the money arsenic a separate, acold wallet reserve for emergencies.

From BUSD to USDC to BTC

In 2024, Binance announced it would shift SAFU’s stablecoin constituent from BUSD into USDC (USDC), pursuing the winddown of its branded stablecoin, framing the alteration arsenic an effort to support the fund’s liquidity and reliability portion keeping it US dollar‑pegged. 

The latest determination goes a measurement further, taking the money retired of stablecoins wholly and into Bitcoin, aligning idiosyncratic extortion reserves with the plus Binance present presents arsenic the industry’s superior long‑term store of value.

Related: Binance applies for MiCA licence successful Greece arsenic EU deadlines loom

Binance’s increasing Bitcoin exposure

With implicit 648,000 BTC, Binance is already 1 of the industry’s largest holders of Bitcoin — a stash that chiefly supports trading, liquidity proviso and idiosyncratic balances connected the exchange.

By moving $1 cardinal successful SAFU reserves into Bitcoin, the exchange’s stash volition magnitude to implicit 12,000 BTC astatine existent prices, surpassing galore of the largest coin treasuries of publically listed firms specified arsenic Tesla, which holds 11,509 BTC and Trump Media, which holds 11,592 BTC. 

The spokesperson said that the BTC would beryllium custodied wrong Binance’s licensed clearing location entity, which is regulated by the Abu Dhabi Global Market.

Users tin verify the SAFU money onchain: 0x420ef1f25563593aF5FE3f9b9d3bC56a8bd8c104, and Binance “aims to” implicit the conversion wrong 30 days.

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