The acronym ‘SAFU’ refers to Secure Asset Fund for Users”. This is an emergency reserve held to protect investor assets on the Binance crypto exchange. The money from the fund is used to pay back investors who lose their assets due to a hack or any other event in an exchange that leads to the loss of user assets.
On the 3rd of July, 2018, Binance announced the Secure Asset Fund for Users (SAFU) as an emergency insurance fund to protect their users who experienced hacks or security breaches. The SAFU fund is run by collecting a portion of users’ trading fees, and the total amount of money raised increases as more users trade on Binance.
Origin
SAFU was created shortly after Binance suffered a major security breach in 2019 to protect users’ assets. According to the CEO of Binance, Changpeng Zhao (CZ):
“To protect the future interests of all users, Binance will create a Secure Asset Fund for Users (SAFU). Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.”
With this initiative, Binance aims to ensure that every user who uses their exchange are protected, even in the unlikely possibility that their security measures may fail. SAFU is funded by allocating 10% of all trading fees received to provide insurance to potential breaches. SAFU funds are stored in secure hard wallets to be accessed only in cases of extreme emergency.
Is Binance Safe?
Binance is regarded as a safe exchange that provides account protection for users with security features like the use of Two Factor Authentication (2FA).
After the last major security breach in 2019, Binance has been relatively safe and secure for trading. Additionally, they try to cover the losses of assets for their users out of their own pockets, which gives a higher level of integrity for the platform.
According to Binance, one of their goals is to never use SAFU, they hope to achieve this by providing the most secure crypto platforms possible for all of their users, whether centralized or decentralized.
