The largest cryptocurrency exchange transferred its own Binance USD (BUSD) stablecoins, which were stored in the User Asset Protection Fund (SAFU), to the tokens of competitors TruUSD (TUSD) and Tether (USDT).
The decision came shortly after partner project Paxos announced last month that it would no longer issue new BUSD.
“Such an exchange is necessary so that the assets in SAFU continue to protect users in the long term. The market capitalization of BUSD continues to decline over time,” explains Binance.
The company claims that the changes will have little to no impact on users. Funds will continue to be held in public verifiable addresses and BUSD will continue to be supported by the Binance marketplace.
In early February, the New York State Department of Financial Services (NYDFS) required Paxos Trust to stop issuing BUSD due to security breaches. Within a day after the announcement, the outflow of funds from Binance amounted to $916 million.
SAFU (Secure Asset Fund for Users; SAFU) was created back in July 2018. Binance spends 10% of trading fees on regular replenishment of the fund. In November, the CEO of the crypto exchange, Changpeng Zhao, announced that amid the instability of the cryptocurrency market, he increased the company’s emergency fund. Earlier, the businessman urged the rest of the cryptocurrency exchanges to follow the example of Binance and create similar “emergency funds”.