Binance cryptocurrency exchange Announced on March 17 that replaced BUSD holdings in the Safe Asset Fund for Users (SAFU) with TrueUSD (TUSD) and Tether (USDT). The move comes in response to Paxos’ recent decision to stop minting new Binance USD (BUSD), leading to a decline in BUSD’s market capitalization over time.
As Paxos will no longer mint new BUSD, #Binance has exchanged the BUSD in the SAFU Fund for TUSD and USDT.
This change will not affect users and funds will remain at publicly verifiable addresses.
The funds are SAFU.https://t.co/edLVgpdCUQ
—Binance (@binance) March 17, 2023
The Safe Asset Fund for Users (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 US$1 billion as of January 29, 2022. The fund’s wallets initially consisted of Binance Coin (BNB), Binance USD (BUSD), and Bitcoin. (BTC). However, Binance has decided to replace BUSD holdings with TUSD and USDT.
Binance has assured its users that this change will not affect them in any way and that their funds will continue to be at publicly verifiable addresses. BUSD will also continue to be supported by Binance. The exchange also stated that it will closely monitor the fund to ensure it remains sufficiently capitalized and will replenish it periodically as needed using its own funds.
On February 13, the issuer of the BUSD stablecoin, Paxos Trust Company, announced that it would halt the issuance of new Binance USD (BUSD) stablecoins due to the ongoing investigation by New York regulators. Paxos stopped minting new BUSD tokens as of February 21, in accordance with instructions and coordination with the New York Department of Financial Services (NYDFS).
Related: Coinbase Disables BUSD Trading
Days after reports of US regulatory scrutiny of Paxos and Binance USD, Binance minted nearly $50 million worth of TrueUSD (TUSD). The transaction took place on February 16, according to Etherscan data, and it came two days after Binance CEO Chanpeng “CZ” Zhao mentioned in a Feb. 14 Twitter Spaces that Binance would look to “diversify” its stablecoin holdings away from BUSD.
In light of the US Securities and Exchange Commission action against Binance’s BUSD, some members of the crypto community have questioned whether the real issue at hand is about stablecoins or Binance, as the SEC does not took action against Paxos’ gold-backed stablecoin called Pax Gold. (PAXG.)
This is an excellent point. Paxos has been a specific target for BUSD, but not for its own Pax dollar.
Look at the bigger picture. FTX crashed, and now all of a sudden the regulators are coming after Binance.
It’s almost like a Binance co-conspirator is reporting on them. https://t.co/FhkrntttlK
— Cryptohippo (@cryptohippo65) February 13, 2023
