Cryptocurrency exchange Binance announced on March 17 that it has replaced BUSD holdings in the Safe Asset Fund for Users (SAFU) with TrueUSD (TUSD) and Tether (USDT). The move is in response to Paxos’ recent decision to stop minting new Binance USD (BUSD), which has caused the market capitalization of BUSD to decline over time.
As Paxos will no longer be minting new BUSD, #Binance has swapped the BUSD in the SAFU Fund for TUSD & USDT.
This change will have no impact on users, and the funds remain on publicly verifiable addresses.
Funds are SAFU.https://t.co/edLVgpdCUQ
—Binance (@binance) March 17, 2023
As Paxos will no longer mint new BUSD, Binance has exchanged the BUSD from the SAFU fund for TUSD and USDT.
This change will have no impact on users, and funds will remain at publicly verifiable addresses.
The Safe User Asset Fund (SAFU) is an emergency insurance fund that was 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 $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 the BUSD wallets 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 held 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, periodically replenishing it as needed using its own funds.
On February 13, BUSD stablecoin issuer 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 guidance and coordination with the New York Department of Financial Services (NYDFS).
Days after reports of US regulatory scrutiny over 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 came two days after Binance CEO Chanpeng “CZ” Zhao mentioned in a Twitter message on February 14 that Binance would seek 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 cryptocurrency community have questioned whether the real issue at hand is about stablecoins or Binance, as the SEC failed to take action against it. Paxos’ gold-backed stablecoin called Pax Gold (PAXG).
This is an excellent point. Paxos has been specifically targeted for BUSD, but not their own Pax dollar.
Look at the bigger picture. FTX collapsed, & now suddenly the regulators are coming after Binance.
It’s almost as if a co-conspirator of Binance is informing on them. https://t.co/FhkrntttlK
— Cryptohippo (@cryptohippo65) February 13, 2023
This is an excellent point. Paxos has been specifically targeted by BUSD, but not its own Pax dollar.
You have to look at the whole picture. FTX crashed and suddenly the regulators are going after Binance.
It almost looks like a Binance shill is ratting them out.
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