What Is SAFU? A 2 Minute Explainer
Key Takeaways
- SAFU (Secure Asset Fund for Users) is an emergency insurance fund created by Binance to protect users’ assets in case of hacks or security breaches.
- Binance established SAFU in July 2018 after a security breach, and it came into play in 2019 when hackers stole 7,000 Bitcoin.
- As of early 2024, SAFU holds $1.3 billion in assets, now entirely converted into the USDC stablecoin for greater transparency and stability.
- Despite past security incidents, Binance remains a trusted cryptocurrency exchange, continuously improving its security measures and user protection.
Binance is the largest cryptocurrency exchange in terms of global trading volume. To enhance user protection, the company established the Secure Asset Fund for Users, better known as SAFU.
In this article, we’ll explore what SAFU is, how it works, and the types of cryptocurrencies it holds.
What is Secure Asset Fund for Users (SAFU)?
The Secure Asset Fund for Users (SAFU) is a fund established by Binance to protect users’ assets in the case of unforeseen security breaches or hacks. It’s an emergency insurance reserve, designed to protect users from losing their funds.
Binance funds SAFU by allocating 10% of its trading fees to the reserve. This measure ensures that users’ investments remain secure, even during an unexpected crisis. Over the years, SAFU has become a symbol of Binance’s commitment to user protection and security.
The Origin of SAFU in Crypto
In 2018, Binance experienced a security breach on its platform. This event underscored the need for a dedicated reserve to protect users’ assets in the event of a similar breach. Shortly after the hack, Binance established SAFU in July 2018, dedicating a portion of its trading fees to build a reserve that could be used in future emergencies.
Just a year later, SAFU would come into play. In May 2019, hackers managed to breach Binance’s security systems, stealing over 7,000 Bitcoin, worth over $40 million at the time.
Although the hack caused significant concern within the cryptocurrency community, Binance’s quick response minimized the damage. No users lost funds, as Binance immediately covered the losses using SAFU.
How Much Is in Binance SAFU?
According to recent reports, Binance continues to maintain a substantial balance in its SAFU reserve. As of April 2024, SAFU holds a total of $1 billion in assets.
Previously, the fund consisted of a combination of Binance Coin (BNB), Bitcoin (BTC), and stablecoins. The exact amount in the SAFU reserve has fluctuated over time due to market conditions.
Since Richard Teng assumed leadership at Binance, the company has further increased transparency around the SAFU fund. The composition of the fund also saw adjustments, converting all SAFU assets into the USDC stablecoin.
Is Binance Still Safe?
Despite past incidents like the 2019 Bitcoin hack, Binance remains one of the most trusted and widely used cryptocurrency exchanges globally. The introduction of SAFU, along with continuous security improvements, has enhanced user confidence in the platform.
FAQs
Who is Richard Teng?
Richard Teng is the current chief executive officer overseeing Binance’s efforts to expand globally. He is known for his background in financial regulation and blockchain.
What is Binance BNB?
Binance Coin (BNB) is Binance’s native cryptocurrency, used for transaction fees and trading on the Binance Smart Chain ecosystem, launch pool events on the Binance exchange, and more.
