While the crypto markets have reacted very negatively to the FTX affair, its prospective buyer Binance is taking the opportunity to push its advantage. The platform has just announced that it will now dedicate $1 billion to “extraordinary circumstances”.
Binance funds its emergency fund amid FTX crisis
The FTX case is turning into a giant publicity stunt for the Binance exchange platform. Not content to have devoured one of his biggest competitors in the span of a week, the platform communicates its reliability, confronted with a trembling ecosystem. It has just announced that its emergency fund, called “Secure Asset Fund for Users (SAFU)was fed.
The fund was established in 2018 and is used precisely to deal with an unexpected financial emergency to protect the assets of Binance users. From now on, this fund will amount to 1 billion dollars.
The communication is two-fold for Binance: it confirms that its services will not collapse right now, and it also shows that the bear market has ultimately affected it very little. It is a masterpiece of Changpeng Zhaoconfirming 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 “reserve certificate”
This is the second such announcement from Binance since yesterday. The platform has also announced the establishment of a “proof of reserve”, in order 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 such as Coinbase and Kraken.
A point that Binance did not fail to highlight in its press release, urging other companies to do the same:
“We encourage other centralized exchanges to follow us and publish the addresses of their insurance holdings.»
Again, this is smart: If Binance’s competitors agree, they will appear to follow Binance. If they refuse, they will look like they have something to hide.
Of course, we can only welcome transparency measures on centralized exchanges to avoid crises like the one that occurred this week for FTX. But we can also ask ourselves how prominent will Binance beand when will society judge that the concentration of power is too great.
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Source: Binance, press release
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