According to the latest Binance news, coins held in SAFU, a fund the exchange has set aside to protect users, are permanently changing. The 2 altcoins to be added with the sold BUSD are as follows…
Binance changes its altcoin reserves in SAFU fund
In a recent announcement, Binance stated that it will replace the BUSD reserve in the Security Fund for Users (SAFU) with TUSD and USDT. This move comes shortly after Paxos, the company authorized to issue BUSD, is now blocked from issuing new tokens.
SAFU was set aside as an emergency insurance fund worth $1 billion to protect users from any crisis environment. Launched by Binance on January 29, 2022, the fund has undergone radical changes with the latest developments.
As Paxos will no longer be minting new BUSD, #Binance has swapped the BUSD in the SAFU Fund for TUSD & USDT.
This change will have no impact on users, and the funds remain on publicly verifiable addresses.
Funds are SAFU.https://t.co/edLVgpdCUQ
— Binance (@binance) March 17, 2023
According to the official announcement, this change will have no impact on users and these funds will remain at publicly verifiable addresses. The report also stated that the SAFU fund is constantly monitored to ensure it is adequately capitalized and replenished periodically as needed, using Binance’s own funds. However, Binance reports that it will continue to support the BUSD currency pair.
Can BUSD disappear over time?
The recent change to the SAFU fund comes as a huge blow to BUSD holders and Binance as it demonstrates a lack of trust in the stablecoin. The troubled stablecoin is rapidly losing dominance as its market cap continues to decline, falling from $15.5 billion recorded in January 2023 to its current value of $8.2 billion.
The situation of BUSD deepened after the US regulator NYDFS imposed sanctions on Paxos, the company authorized to print BUSD. BUSD had to lose price stability at one point, dropping to $0.9950. It has since recovered from its previous losses and in light of the latest news about Binance, the dollar is regaining its peg.
Funds allocated for the COVID-19 period have been converted into these 3 coins
Binance CEO CZ also announced that the remaining funds from the Industry Recovery Initiative (IRI) will be used to purchase BTC, BNB and ETH, in response to the ongoing US banking crisis affecting stablecoins in the cryptocurrency market. IRI was established to provide support to projects and businesses affected by the COVID-19 pandemic. CZ stressed that some of the fund’s activities will take place on the Blockchain and all transactions will be public.
As Kriptokoin.com, we have included CZ’s explanations in detail in this article.
https://twitter.com/cz_binance/status/1635131601884700674
Overall, Binance’s decision to exchange BUSD reserves in SAFU funds for TUSD and USDT demonstrates its commitment to ensuring the safety and protection of user funds. As the market continues to evolve, it is critical that cryptocurrency exchanges remain agile and make the necessary adjustments to protect the interests of their users.
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