What is SAFU in the world of Crypto? BTC is moved to a new cold wallet by Binance, funding SAFU.

“SAFU” stands for “Secure Asset Fund for Users.” This emergency reserve is kept on hand by the Binance cryptocurrency exchange to safeguard investor funds. The fund’s proceeds are utilised to reimburse investors who have their assets lost as a result of a hack or some other exchange-related incident that results in the forfeiture of user assets.

Secure Asset Fund for Users is an emergency insurance fund designed to shield Binance users from hacks or security breaches, was announced on July 3rd, 2018. A portion of users’ trading fees go towards funding the Secure Asset Fund for Users fund, which grows in size as more people trade on Binance.

Starting Point

In order to safeguard user funds, SAFU was established soon after Binance experienced a significant security breach in 2019. As stated by Changpeng Zhao (CZ), CEO of Binance: Binance will establish a Secure Asset Fund for Users, in order to safeguard the interests of all users going forward. We will donate 10% of every fee for trading to Secure Asset Fund for Users as of 2018/07/14 in order to provide extreme protection for our users’ funds. This money will be kept in a different cold wallet.

By launching this programme, Binance hopes to protect all of its users in the unlikely event that their security protocols are compromised. Ten percent of every fee for trading are donated to SAFU in order to cover any potential breaches. Secure Asset Fund for Users funds are kept in safe physical wallets that are only accessible in the most dire circumstances.

The decentralised SAFU NETWORK money project includes an integrated charity programme that enables users to access simple loans, insurance, partnerships, and much more to break free from the rat race. This not only enables users to convert wasteful money into productive money, but also does so efficiently. secure. Through the Safu Network Charity Programme, we hope to combat poverty and help underprivileged groups make ends meet. As part of this initiative, 2% of Safu Network’s profits will go towards charitable causes. For that reason, SAFU is waiting for you.

With its multi-use wallet that includes high return cultivation and static marking pools, Secure Asset Fund for Users Network offers the most secure electronic currency and fiat wallet in the world. It helps you store, send, receive, buy, sell, trade, and make automated revenue quickly and securely, while offering all the benefits of multiple wallets and combined/decentralized trades. However, you maintain complete control over the assets you have in your SAFUWALLET by keeping your seed phrases.

The Secure Asset Fund for Users network consists of the strongest electronic wallet for government-issued money in the world, a multipurpose wallet with an amazing yield that is constantly growing, and a variety of static guarantees that let you store, send, receive, buy, sell, trade, and automate profit in a quick and safe manner. By storing your seed explanations in your SAFUWALLET, you have complete control over your assets, along with all the potential benefits of elective accounts and bound together/decentralized trades. Your assets are under your control, and they are SAFU when using Secure Network.

SAFU: What Does It Mean?

SAFU is a term from the cryptocurrency slang that emphasises the secure keeping of your cryptocurrency, similar to GM, NGMI, WAGMI, and FUD.

A user’s Secure Asset Fund is similar to an emergency fund. The funds in this reserve fund, for instance, will be given to investors to make up for losses in the event that a cryptocurrency exchange that supports SAFU is compromised. In July 2018, Binance first developed it to give its users greater security. In order to protect its users from losses or scams, Binance sets aside a portion of its trading fees and grows it considerably.

The three pillars of Secure Asset Fund for Users’s meaning are transparency, integrity, and trust. Centralised exchanges are highly trusted by retail traders and investors, and SAFU makes sure that investor funds are protected in the event of a problem. Over $1 billion was invested in SAFU by Binance as of November of this year. However, because this fund is held in BTC, BNB, and USD, its value varies in tandem with market movements, much like the erratic cryptocurrency market.

Since its inception, users and Binance have frequently used the term SAFU to reassure themselves that their funds are secure in the event of any unfavourable circumstances. 2018 saw the most recent security breach on Binance. which reduced the capital of investors and prompted SAFU’s establishment. Following this incident, steps were taken to safeguard investors and exchanges from similar occurrences.

Why Is SAFU Necessary?

Investing in cryptocurrencies can be exceedingly hazardous due to their extreme volatility, susceptibility to fraud, and vulnerability to data breaches. Numerous cryptocurrency scams have already made headlines, and we’ve heard how they’ve affected investors and exchanges. Getting insurance is a common way to handle this. But because the cryptocurrency market is so volatile, insurance providers either think it’s a bad idea to invest in it or raise their premiums. These two are not economically viable.

Therefore, establishing a Secure Asset Fund for Users guarantees that cryptocurrency exchanges are able to take action on their end to safeguard investor funds from fraud. The risk involved in choosing insurance goes down as the likelihood of a risk assertion goes down since exchanges keep investments in the type of the Secure Asset Fund for Users to guard against negative risks. Crypto exchanges will therefore probably receive better insurance offers. SAFU offers investors and exchanges a buffer to safeguard their monetary interests. This is a requirement for all cryptocurrency platforms, not just Binance.

Is Biance Secure?

Thanks to security features like Two Factor Authentication (2FA), Binance is recognised as a safe exchange that protects user accounts. For trading purposes, Binance has been comparatively safe and secure since the most recent significant security breach in 2019. A higher degree of integrity is provided for the platform by their attempt to personally pay for the destruction of funds for their users. Providing the safest cryptocurrency platforms for all of their users—centralized or decentralized—is one of Binance’s stated objectives. They aim to never utilise SAFU.

Biance Uses TUSD and USDT in Place of BUSD Stablecoin in the “SAFU” Fund

The $1 billion “Secure Asset Fund for Users” (SAFU), unveiled by Binance on January 29, 2022, is an emergency insurance fund intended to shield Binance users in the event of calamity. BNB, BUSD, and BTC were among the initial holdings of the SAFU fund. Binance has added two more significant stablecoins to the fund in place of BUSD. Ever since state authorities in New York ordered Paxos to stop minting new BUSD. The Binance exchange ultimately decided on The TrueUSD currency exchange (TUSD) as well as Tether (USDT) as a BUSD substitute. With this transfer, SAFU assets will be safeguarding clients even as the market value of the BUSD declines gradually.

Furthermore, users do not need to take any action. The official release also states that all funds will be kept in publicly verifiable locations. To make sure the Secure Asset Fund for Users fund is adequately funded, the report claims that Binance periodically contributes additional funds from its own reserves.

Beleaguered BUSD Stablecoin

However, the leading cryptocurrency exchange made it clear that they will continue to back the BUSD trading pair. Investors in Binance and BUSD will be devastated by this news, as it shows how widely the stablecoin is distrusted. The market estimation of the erratic stablecoin has gradually decreased to just $8.2 billion from its peak of $15.5 billion in the first month of 2023.

Furthermore, as stated in the official blog post, Dogecoin (DOGE) is currently one of Binance’s assets that can be verified. Customers of Binance can now independently verify their holdings of Dogecoin (DOGE) and ten other cryptocurrencies thanks to Binance’s enhanced proof-of-reserves system.

Concerning Suspicion, 44% of Binance SAFU Fund’s Holdings Are in BNB

In July 2018, Binance launched SAFU (the Secure Asset Fund for Users), an insurance fund designed to safeguard users’ assets. According to the exchange, the fund will have an equal amount of Bitcoin, BNB, its own token, and BUSD, its stablecoin that is issued with Paxos.

However, Willy Woo, a Bitcoin analyst, voiced concerns regarding Binance’s Secure Asset Fund for Users fund’s current makeup in a recent post. He referenced on-chain metrics showing that $367 million, or approximately 44%, of the fund’s $937 million was made up of Binance’s BNB token. Bitcoin completed the fund with $270 million, or about 24%, and BUSD with $300 million, making up the remaining 32%.

Binance in the Defensive

After that, a number of pundits hurried to defend the fund and the validity of its composition. One drew attention to the differences between FTX-issued tokens and Binance tokens. “Binance’s funds are easily accessible, unencumbered, and displayed on the network for all to see,” he declared. “There is no liquidity for FTT’s billions of FDV, and it is overleveraged with fraud and debts.”

Changpeng Zhao, the CEO of Binance, also appeared to address the reason behind the fund’s unbalanced composition. He claimed that despite the fact that the $1 billion invest is “roughly parted between the BTC, BUSD, and BNB,” the price of BNB has increased more quickly than that of BTC since the fund’s most recent rebalancing. Zhao said that in the previous day, Binance had contributed an additional one billion dollars to its industry rehabilitation fund.

The Industry Recovery Programme Launches

Binance announced earlier that it would assist failing cryptocurrency companies, but yesterday it officially announced its Industry Rehabilitation Initiative (IRI). Zhao stated above that Binance will add a further $1 billion to the support following its initial $1 billion commitment. According to the announcement, a number of additional companions had joined the effort and contributed a total of fifty million dollars to the fund’s assets. These partners have the right to examine each of the 150 applicants that have already applied to the fund.

The announcement outlined three requirements for applicants to the fund: “1) a clearly defined and feasible business model; 2) innovation and long-term worth creation; and 3) an unwavering focus on risk management.” Rival cryptocurrency exchange Bybit also unveiled its own recovery initiative, in addition to Binance’s IRI. Bybit stated that it aspires to “be the Crypto Ark’s of the world” through its one hundred-million-dollar support fund, despite not having the same financial resources as its rival.