While the crypto markets have reacted very negatively to the FTX affair, its future buyer Binance is taking the opportunity to push its advantage. The platform has just announced that it will now dedicate $1 billion for “exceptional circumstances”.
Binance Funds Its Emergency Fund Amid FTX Crisis
The FTX case is turning into a gigantic publicity stunt for the Binance exchange platform. Not content to have devoured one of its biggest competitors in the space of a week, the platform communicates on its reliability, faced with a trembling ecosystem. It has just announced that its emergency fund, called “Secure Asset Fund for Users (SAFU)was fed.
Created in 2018, the fund is used precisely to manage an unanticipated economic emergency, in order to protect the assets of Binance users. From now on, this fund will amount to 1 billion dollars.
The communication is twofold for Binance: it affirms that its services will not collapse anytime soon, and it also shows that the bear market has ultimately affected it very little. It’s a masterstroke from Changpeng Zhaowhich confirms that his company intends to maintain its hegemony.
👉 To learn more – Who is Changpeng Zhao (CZ), the founder of the Binance empire?
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Emergency fund and “proof of reserve”
This is the second such announcement made by Binance since yesterday. The platform has also announced the establishment of a “proof of reserve”, in order to be able to prove that sufficient funds are present to guarantee the financial security of users. Nowadays, few exchanges have implemented controls of this typewith the notable exception of other major platforms like Coinbase and Kraken.
A point that Binance did not fail to highlight in its press release, inviting other companies to do the same:
“We call on other centralized exchanges to follow us and publish publicly the addresses of their insurance portfolios.»
Again, this is clever: if Binance’s competitors agree, they will appear to be following Binance. If they refuse, they will look like they have something to hide.
Of course, we can only welcome transparency measures at centralized exchanges, in order to avoid crises such as the one that occurred this week for FTX. But we can also ask ourselves how prominent is Binance going to beand when will the community judge that the concentration of powers is excessive.
👉 More info on the Binance platform
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Published by Editions Larousse
Source: Binance, press release
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Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
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