Binance has just announced that its security fund is now valued at over $1 billion. This money is stored in the form of bitcoins (BTC) on two different wallets and will only be used in case of a large-scale hack or theft on the platform.
1 billion to protect Binance users
The Binance platform announced via a post on its official blog that it can now cover its users to the tune of $1 billion in case of a hack.
The fund was originally set up in July 2018 as the Secure Asset Fund for Users (SAFU) to protect the various investments of Binance users. Since then, 10% of the amount of all the platform’s transaction fees are gradually added to the security fund.
Binance states that the amount of the fund will continue to grow along with the number of users on the platform in order to ensure a growing community.
The article also states that the 2 wallets containing the security fund are public and can be visited at the following addresses: wallet 1 and wallet 2.
Binance invites other exchange platforms to do the same in order to improve relations with the various regulators:
“Binance calls on all other centralized exchange platforms to publish the addresses of their security fund wallets, as this will benefit the entire ecosystem and demonstrate to governments, regulators and investors our collective commitment to maintaining trust, integrity and transparency in the cryptocurrency ecosystem.”
Note that the funds held on Binance’s 2 wallets are in Bitcoin (BTC), and thus their value is subject to the volatility of the cryptocurrency market.
Binance is looking to burnish its image
This announcement is first of all good news for the users of the platform. Indeed, Binance had experienced a hack in 2019 during which hackers had managed to steal the passwords of some users via phishing methods, thus removing $40 million from the platform in the form of BTC.
Binance is far from being an isolated case: just a few days ago, hackers managed to exploit a flaw in the Qubit Finance bridge, stealing more than $80 million in BTC.
Also last month, over $30 million was stolen from users of the Grim Finance protocol.
More globally, a report from the Immunefi platform estimated the total amount of various hacks and other malicious practices taking place in the cryptocurrency world at $10 billion.
Binance users will therefore be reassured to know that the platform will be able to insure their funds in this scenario.
A measure that should also reassure regulators
But a security fund of this magnitude is also a positive sign towards the different international regulators and jurisdictions.
Indeed, Binance has encountered some legal setbacks in certain countries or regions such as in the province of Ontario, Canada, where its users were forced to close their accounts unexpectedly due to a dispute with the local authority.
After the installation of a hub for cryptocurrencies in Dubai and the wish for Changpeng Zhao, the CEO of Binance, to set up a headquarters for the company, Binance continues to show its white paws and give various tokens of its good faith, but above all of its ability to protect its users.
We still hope that Binance’s request to other platforms to publish their wallet addresses publicly will be heard.
