Binance Holdings Ltd. announced that it had built a $1 billion insurance fund for its users amidst a series of cyberattacks against its platforms, according to a company memo.
While the memo revealed that the world’s largest crypto exchange by trading volume had set aside money for the emergency wallet since July 2018, it had only just consolidated the funds in one place. Based on the January 29 opening price, the fund was valued at $1 billion.
“At Binance we always said ‘funds are safe,’ and today the Binance Secure Asset Fund size acts as an effective safeguard as well as protection for users against such unlikely issues,”
General Manager Changpeng “CZ” Zhao said in the memo.
After suffering one in 2019, Binance decided to act after a recent series of cyberattacks. Earlier this month, Crypto.com customer accounts saw unauthorized withdrawals of up to $34 million in cryptocurrencies. Meanwhile, hackers seized an additional $80 million in digital assets through a blockchain extension by Qubit Finance last week.
Binance’s safety concerns
Having suffered numerous security infractions, cryptocurrency exchanges like Binance are at pains to adhere to regulations to assuage safety concerns. For instance, Binance just restricted personal accounts of several users in Nigeria in order to observe KYC and anti-money laundering measures. While 281 Nigerian accounts were restricted, 38% of which at the request of international law enforcement, 79 cases have already been resolved.
Binance has already faced allegations this year that it may have enabled money laundering on its platform due to its lax compliance with regulations. For his part, Binance CEO CZ chastised the claims, calling them FUD. “Reporters chatting with people who have been fired from Binance and partners who have failed trying to smear us,” he said. tweeted. “We focus on anti-money laundering, transparent and welcome regulation.”
