Binance decides to increase the amount of the emergency insurance fund to $1 billion
Binance’s CEO Changpeng Zhao said that the company decided to increase the amount of its emergency insurance fund to $1 billion because of the volatility in the crypto market. For this purpose, the exchange transferred to the fund tokens worth $265 million.
Zhao tweeted that Binance replenished its secure asset fund for users (SAFU) in order to adapt to the latest price fluctuations in the crypto market.
The secure asset fund for users for users was established back in 2018. The company spends 10% of the amount of trading fees on its replenishment. The funds are stored in BUSD, BNB and BTC.
Earlier, Zhao called on the CEOs of other crypto exchanges to create similar funds. He believes that this would convince regulators that crypto exchanges strive to protect users’ assets, as well as make the work of these platforms more transparent.
In addition, while other platforms have been reporting staff cuts, Zhao intends to use crypto winter to develop the company and hire new employees.
In January, SAFU’s asset amount was equivalent to $1 billion. Due to price fluctuations in the crypto market, this amount decreased to $735 million.
The prices of Bitcoin and other cryptocurrencies have fallen sharply amid news of the bankruptcy of FTX. Bitcoin‘s price dropped to $15,700, and altcoins lost from 20% to 30% of their value in one day.
Binance intended to buy FTX because of FTX’s liquidity crisis. However, after checking its financial condition, Binance refused the deal. FTX also sought help from OKX and Coinbase, but in vain.