Key facts:
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According to Binance, the intention is to “improve the reliability” of the fund.
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The fund was made up of different crypto assets, including TUSD, BNB, bitcoin and USDT.
The largest cryptocurrency exchange on the market, Binance, converted all of the assets deposited in the safekeeping fund for users to USD Coin (USDC), which includes 16,000 bitcoins (BTC).
In a statement, the exchange indicated that, in order to “further improve the reliability” of the Secure Asset Fund for Users (SAFU), valued at USD 1 billion, it made the decision to take the holdings of that fund to the second largest stablecoin on the market, developed by the private company Circle.
In this way, all the crypto assets, True USD (TUSD), Binance Coin (BNB), bitcoin and USD Tether (USDT), which were part of the safekeeping fund, They were converted into USDC and can be checked at one address. According to data from Arkham Intelligence, more than 16,200 BTC were relocated off the exchange today.
SAFU is the user asset protection fund, created in 2018 by now former CEO Changpeng Zhao. At that time it was thought as a response to “extreme situations”such as an eventual bankruptcy, crash or massive hack of the exchange.
With its election, Binance leaves aside USDT, the largest stablecoin in the market by capitalization and trading volume, but more significantly is the fact that it distances itself from bitcoin.
The choice of USDC over USDT and bitcoin could be understood as a strategic move considering that this company faces intense regulatory scrutiny in the United States and other countries around the world.
This scrutiny that has fallen on Binance intensified after Israel announced that it had frozen exchange accounts linked to Hamas, therefore it is clear that in some way the regulators pressured the cryptocurrency exchange to support its emergency fund in the stablecoin. USDC and separate from bitcoin and USDT, assets that governments often associate with crime, although that narrative is unproven.
As reported by CriptoNoticias, at least 5 countries in the world have already opened investigations against Binance. With some nations, such as Nigeria, even going to the point to arrest executives of that cryptocurrency exchange.
That company is accused of, among other things, financial crimes such as money laundering and terrorist financing. Likewise, they accuse her of fraud and swindling. In fact, the exchange paid the largest fine ever imposed by the United States to a company in the cryptocurrency sector, exceeding USD 4,000 million.
Binance’s choice of USDC also comes when remembering that Circle is one of the most regulated cryptocurrency companies in the United States. So much so that he even asked the government of that country that establishes a licensing regime for companies in the sector.
All this also occurs when doubts about USDT reserves remain alive, even when the North American country’s justice system dismissed a lawsuit against the company Tether Limited for its reserves.
It should be remembered that, in February 2021, both Tether Limited and the Bitfinex exchange paid a fine of USD 18.5 million to the New York Attorney General’s Office, which accused these companies of offering services illegally. and lying about stablecoin backing.
