Binance has amassed around $1 billion for an insurance fund, created as a buffer against the impact of a potential hack.
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The exchange has been earmarking money to protect users interests since 2018 and recently consolidated these to one place, according to a press release. When the Secure Asset Fund for Users (SAFU) was established, Binance committed 10% of all trading fees in order to grow it to a sizable level to safeguard users’ interests, the release added.
It said it will continue to monitor the SAFU in order to ensure the fund size remains adequate. The value will fluctuate based on the market.
“We call on all centralised exchanges to do the same as it will benefit the entire ecosystem and demonstrate to governments, regulators and important stakeholders our collective commitment to uphold trust, integrity and transparency in the crypto ecosystem,” he said.
The moves come amid a slew of high profile hacks targeting exchanges. Binance suffered an attack in 2019, worth over $40 million. More recently, crypto exchange AscendEX said that its hot wallet was breached to the tune of $78 million. BitMart was also hacked late last year for $200 million.
Binance isn’t the only exchange which has taken this step. BitMEX is known for its large emergency fund which grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price of that particular position.