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 been earmarking money for the emergency portfolio since July 2018, it had only just recently consolidated the funds into one place. Based on the opening price on January 29, 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,”
Chief Executive Officer Changpeng “CZ” Zhao said in the memo.
Having suffered one itself in 2019, Binance decided to take action after a recent series of cyberattacks. Earlier this month, customer accounts from Crypto.com 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 had to face allegations this year that it may have enabled money laundering on its platform due to its lax compliance to regulations. For his part, Binance CEO CZ rebuked the claims, calling them FUD. “Journalists talking to people who were let go from Binance and partners that didn’t work out trying to smear us,” he tweeted. “We are focused on anti-money laundering, transparent and welcome regulation.”
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