HomeBlockchainBinance replaces BUSD with TUSD and USDT in SAFU fund

Binance replaces BUSD with TUSD and USDT in SAFU fund


Binance, one of the world’s largest cryptocurrency exchanges, announced on March 17 that it has replaced Binance USD (BUSD) holdings in its Safe Asset Fund for Users (SAFU) with TrueUSD (TUSD) and Tether (USDT). The move comes in response to Paxos’ recent move to stop minting new BUSD, which has led to the asset’s market capitalization falling. SAFU is an emergency insurance fund established by Binance in July 2018 to protect user funds in the event of security breaches or other unforeseen events.

Binance committed a percentage of trading fees to grow the fund, which was valued at $1 billion as of January 29, 2022. SAFU wallets initially consisted of BNB (BNB), Bitcoin (BTC), and Binance USD. , which has now been replaced by TUSD and USDT. Binance assured users that the change would not affect them, their funds would continue to be held at publicly verifiable addresses, and BUSD would continue to be supported. The exchange added that it would closely monitor the fund to ensure it remains sufficiently capitalized and will replenish it periodically as needed using its own funds.

On February 13, BUSD issuer Paxos Trust Company announced that it would stop issuing new BUSD effective February 21 in accordance with instructions and in coordination with the New York Department of Financial Services. Days after reports surfaced that Paxos and BUSD were being scrutinized by US regulators, Binance minted nearly $50 million worth of TUSD. The transaction took place on Feb. 16, according to Etherscan data, and came two days after Binance CEO Chanpeng Zhao mentioned in a Feb. 14 Twitter space that Binance would look to “diversify” its coin holdings. stable outside of BUSD.

Since the US Securities and Exchange Commission also took action against BUSD, some members of the crypto community have questioned whether stablecoins are the real issue in question or if it is actually Binance, as the SEC does not took action against the gold-backed stablecoin of Paxos. Pax Gold (PAXG).

Stablecoins, such as BUSD, TUSD, and USDT, are digital currencies designed to hold a stable value relative to a reference asset, such as the US dollar. They have become increasingly popular in recent years as a means of facilitating transactions on cryptocurrency exchanges without having to convert to fiat currency, which can be costly and time consuming.

However, stablecoins have also come under scrutiny from regulators due to concerns about their lack of transparency and potential for use in illicit activities. Recent actions by the SEC and the New York Department of Financial Services against BUSD and Paxos are part of a broader crackdown on stablecoins and cryptocurrencies in general.

In response, cryptocurrency exchanges and other market participants are looking to diversify their stablecoin holdings to reduce their exposure to any particular asset. This seems to be the motivation behind Binance’s decision to replace BUSD with TUSD and USDT in its SAFU fund.


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