Binance’s emergency insurance fund is largely comprised of a cryptocurrency tied to the company itself, according to on-chain data.
The two addresses associated with the fund show that its BNB tokens account for 44% of its reserves.
The Wrong Type of Insurance?
As shared by on-chain analyst Willy Woo on Twitter, the Secure Asset Fund for Users (SAFU) includes $367 million worth of BNB. The remainder is made up of Binance’s dollar-pegged stablecoin BUSD ($300 million) and Bitcoin, the largest cryptocurrency by market cap ($270 million).
These balances are verifiable through public blockchain data, at Binance’s Bitcoin and BSC addresses respectively. The exchange soon plans to implement a proof of reserves system verifying its total exchange assets as well.
Nevertheless, Woo found Binance’s reliance on BNB within the reserve to be concerning.
“While I commend Binance for having such a fund, there’s no sense putting incidence-correlated BNB in there,” he said. “H
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