Binance is shifting its flagship user protection vehicle, the Secure Asset Fund for Users (SAFU), from stablecoin holdings into Bitcoin over the next 30 days, re‑denominating the fund’s reserves into BTC.
In an open letter to the crypto community, the exchange framed the move as an expression of its conviction that Bitcoin (BTC) is the core long‑term asset of the crypto ecosystem rather than just another trading product, and said it will rebalance the fund back up to $1 billion if market volatility drives its value below $800 million.
That decision effectively makes the fund more exposed to Bitcoin price swings, raising questions about whether a sharp BTC drawdown could weaken the buffer precisely when a major security or insolvency event might require rapid payouts.
A spokesperson from Binance told Cointelegraph that the exchange would stand by the industry “through market cycles and uncertainty,” continue investing resources in the broader ecosystem and would consider allocations of “core assets,” such as BNB, in its next review.
The spokesperson added that Binance would “use our treasury reserves” to top up the SAFU fund if it dipped below $800 million.
Protecting users in “extreme” cases
SAFU, launched in 2018, is funded by a slice of Binance trading fees and is designed as an emergency pot to reimburse users in “extreme” cases such as hacks or critical platform failures.
The spokesperson said that the types of losses covered by SAFU “may include losses sustained by users in the rare event of a platform security or other incident.”
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In May 2019, for example, when hackers stole around 7,000 BTC (about $40 million at the time), exploited customers were made whole through SAFU, with Binance saying that no user balances were reduced.
The exchange has since promoted SAFU as a core pillar of its trust and risk management story, noting in recent communications that it holds user assets fully backed on a 1:1 basis and maintains the fund as a separate, cold wallet reserve for emergencies.
From BUSD to USDC to BTC
In 2024, Binance announced it would shift SAFU’s stablecoin component from BUSD into USDC (USDC), following the wind down of its branded stablecoin, framing the change as an effort to maintain the fund’s liquidity and reliability while keeping it US dollar‑pegged.
The latest move goes a step further, taking the fund out of stablecoins entirely and into Bitcoin, aligning user protection reserves with the asset Binance now presents as the industry’s primary long‑term store of value.
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Binance’s growing Bitcoin exposure
With over 648,000 BTC, Binance is already one of the industry’s biggest holders of Bitcoin, which primarily supports trading, liquidity provision and user balances on the exchange.
By moving $1 billion in SAFU reserves into Bitcoin, the fund would hold roughly 12,000 BTC at current prices, making it one of the largest single-purpose Bitcoin-denominated reserve funds in the industry.
The spokesperson said that the BTC would be custodied within Binance’s licensed clearing house entity, which is regulated by the Abu Dhabi Global Market.
Users can verify the SAFU fund onchain: 0x420ef1f25563593aF5FE3f9b9d3bC56a8bd8c104, and Binance “aims to” complete the conversion within 30 days.
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