- Binance has relocated its $1 billion Secure Asset Fund for Users (SAFU) to USDC
- The fund was previously denominated in TUSD, BNB, BTC, and USDT
- The exchange says it wants to move to a “trusted, audited, and transparent stablecoin”
Binance has moved its $1 billion Secure Asset Fund for Users (SAFU) to USDC 18 months after culling all USDC pairs from its exchange. The fund was established in July 2018 as a form of protection for customers in case of a hack of Binance’s system, with the amount held in TUSD, BNB, BTC, and USDT. Binance has taken the decision to swap these disparate holdings into USDC, retaining its dollar value. Fortunately, the fund has only been called on once, following a hack in May 2019.
“Trusted, Audited, and Transparent Stablecoin”
Binance’s SAFU fund was initially allocated 10% of all trading fees, with the funds held in a mixture of stablecoins and bitcoin. The decision to move the whole lots to USDC makes sense on a number of levels, seeing as TUSD is hardly used and the volatility of BNB and BTC has the potential to reduce the potency of the fund.
Tether is also under pressure over increased usage of its USDT stablecoin for illegal activities, while USDC is seeing more institutional adoption and is being seen as a more secure stablecoin. Binance didn’t elaborate on the reason for the move, but it seems to echo this theory, saying in a press release only that it was “Making use of a trusted, audited, and transparent stablecoin [which] further enhances its reliability and ensures it remains stable at $1B.”
USDC Reversal Imminent?
The move comes months into the reign of CEO Richard Teng, who may be looking to find ways to make the exchange seem more compliant or, at least, less connected to entities that are under the kind of scrutiny that Tether is at present. The move is quite ironic, however, seeing as Binance ditched support for all USDC pairs in a stablecoin cull in September 2022, converting all USDC holdings into BUSD.
The SAFU fund has only been used once, in May 2019, when 7,000 BTC was stolen in a security breach.
