Binance Replaces BUSD With TUSD And USDT In SAFU Fund – Crypto News Today

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 had replaced Binance USD (BUSD) holdings in its Secure Asset Fund for Users (SAFU) with TrueUSD (TUSD) and Tether (USDT). The move comes in response to Paxos’ recent decision to stop creating new BUSD, which caused the asset’s market cap to decline. SAFU is an emergency insurance fund created by Binance in July 2018 to protect user funds in the event of security breaches or other unforeseen events.

Binance incurred a percentage of trading fees to grow the fund, which was valued at $1 billion as of January 29, 2022. SAFU’s 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 impact them, their funds would continue to be held at publicly verifiable addresses, and BUSD would continue to be supported. The exchange added that it will closely monitor the fund to ensure it remains sufficiently capitalized and will periodically top it up if necessary using its own funds.

On February 13, the issuer of BUSD, Paxos Trust Company, announced that it would cease issuing new BUSD effective February 21, in accordance with instructions and in coordination with the New York Department of Financial Services. Days after reports emerged that US regulators were reviewing Paxos and BUSD, Binance hit nearly $50 million worth of TUSD. The transaction took place on February 16, according to data from Etherscan, and came two days after Binance CEO Chanpeng Zhao mentioned in a February 14 Twitter space that Binance would seek to “diversify” its holdings into stablecoins away from BUSD.

With the U.S. Securities and Exchange Commission also taking action against BUSD, some members of the crypto community have questioned whether stablecoins are the real problem or if it’s actually Binance, as the SEC has not taken action against Paxos’ gold-backed stablecoin, Pax Gold (PAXG).

Stablecoins, such as BUSD, TUSD, and USDT, are digital currencies designed to maintain a stable value against a benchmark asset, such as the US dollar. They have become increasingly popular in recent years as a way to facilitate transactions on cryptocurrency exchanges without having to convert to fiat currency, which can be expensive 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 cryptocurrency more broadly.

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

Binance Replaces BUSD With TUSD And USDT In SAFU Fund

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