Cryptocurrency exchange Binance has a Secure Asset Fund for Users (SAFU) initiative which is a user asset security fund. Now, the value of these funds has been increased to USD 1 billion.
This step was taken by Binance amid an increasing number of hacking cases and security breaches in the cryptocurrency industry. The SAFU Fund itself is a measure that Binance launched in 2018 to protect user interests.
This insurance fund is obtained by allocating a certain percentage of the trading fees that Binance sets. Binance has previously used these funds to refund users' funds in several cases.
One of them is the case that occurred in May 2018. This insurance fund was also used to compensate users' funds that were lost due to the Cover finance minting attack last December.
“Transparency is an important element in building trust, which is why we published our insurance fund wallet addresses. We urge all other exchanges to do the same,” Binance CEO Changpeng Zhao explained in a statement received by us.
"This will benefit the entire crypto ecosystem and demonstrate to governments, regulators and other stakeholders our collective commitment to upholding trust, integrity and transparency in the crypto ecosystem," he added.
In the last few weeks, one of the crypto exchanges, crypto.com, was hacked for a loss of USD 33.8 million along with another exchange Bitmart, which experienced a hack of funds amounting to USD 200 million of stolen funds.
Overall, it is estimated that around USD 1 billion was lost from various DeFi platforms and centralized exchanges due to hacks and exploits. This is the reason behind Binance's commitment to maintaining the largest crypto insurance fund and increasing the transparency of the fund to users.
Apart from Binance, there are other international crypto exchanges such as Coinbase and FTX that also publish the addresses of these insurance funds.