Binance Converts $1Billion ‘SAFU’ Emergency Fund into USDC

Jimmy Aki
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Binance has recently converted its $1 billion Secure Asset Fund for Users (SAFU) into Circle’s dollar-pegged USDC stablecoin. This strategic move was disclosed by the exchange on April 18.

Binance SAFU to Leverage USDC Stability & Reliability

Binance outlined in its official statement that the decision to convert its SAFU emergency fund into USDC stablecoin will bolster the fund’s reliability and ensure the balance value remains at $1B despite market volatility.

The company said,

“SAFU continues to be a core part of our responsibility to the ecosystem, and we continue to evolve to meet market conditions head-on. Today, we are transferring 100% of SAFU’s assets to USDC.”

Binance SAFU is an insurance fund established in 2018 to protect users in extreme situations such as bankruptcy, cyber-attacks, or unforeseen losses. The $1B worth of SAFU funds will reimburse each victim of these events.

According to Etherscan on-chain data, the wallet connected to Binance SAFU converted $738M worth of the exchange token, Binance Coin (BNB), into $800M USDC.

There was also a transfer of 16,277 BTC (worth $1 billion) from a Bitcoin wallet linked to the SAFU fund to one of the exchange’s hot wallets, according to blockchain transaction data from OXT, while $1 billion worth of USDC was added to the Ethereum wallet associated with the fund.

This move means that the billion-dollar Binance insurance fund now accounts for approximately 3% of the entire supply of Circle’s USDC stablecoin, which amounts to $32.66 billion.

The conversion to USDC is set to maintain a price level with the fiat US dollar, which is the latest initiative under Richard Teng, Binance CEO, over the past five months of his leadership in the exchange company.

Teng assumed the role from Changpeng Zhao (CZ) following a November 2023 plea deal with the US regulatory agencies that led to a $4.3 billion fine for Binance, with Binance.US suffering some setback from the lawsuit. He has since overseen the spin-off of Binance’s venture capital unit and integrated stricter requirements for new token listings on the platform.

Binance Continues Path to Reclaim Trust & Integrity

Following its plea deal with the US authorities, Binance has been actively implementing new measures to rebuild trust and integrity on a global scale. The recent conversion of its $1 billion SAFU into USDC stablecoin is part of this effort, signaling a commitment to fostering its financial stability and security.

In addition, Binance has made an impressive re-entry into the Indian market. The exchange will return as an entity registered with India’s Financial Intelligence Unit (FIU) under the finance ministry, following payment of a $2 million fine. The exchange will also comply with all applicable laws in India, including the Prevention of Money Laundering Act (PMLA) and the Virtual Digital Asset (VDA) taxation framework.

This recent development came after Binance, along with eight other offshore cryptocurrency platforms, was banned from operating in India through web addresses and mobile applications.

Binance had, before the ban, held a major position in the Indian market, accounting for nearly 90% of the estimated $4 billion worth of crypto holdings by Indian nationals.

This was attributed to Binance’s non-compliance with tax laws, which allowed investors to trade without paying the 1% tax deducted at source (TDS) applicable on registered exchanges.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.