- The user protection fund is half empty. The address Binance publishes as its Secure Asset Fund for Users (SAFU) wallet held just above 7,500 bitcoin, worth roughly $580 million, as of Tuesday after four transactions on Oct. 31, according to mempool.space data cited by CoinDesk. It held 15,000 BTC in February, when Binance finished converting the roughly $1 billion fund from stablecoins into bitcoin.
- The fund is below Binance’s own trigger. Binance’s SAFU FAQ says it rebalances the fund back to $1 billion if its value falls below $800 million “due to BTC price fluctuations.” That rule does not cover the fund being spent, and the exchange has not said when it will refill it.
- SAFU is only part of the bill. Binance said on Oct. 31 it would make a partial SAFU deployment as part of the $6.34 billion it set aside to cover the hack, alongside its corporate treasury and a portion of its futures insurance fund. It has not disclosed how much of the insurance fund was used.
- The attribution fight continues. The FBI attributed the attack to North Korea’s TraderTraitor group on Oct. 31, and North Korea on Tuesday rejected the allegation as a “grave political provocation,” according to CNBC.
What Happened?
Binance has used about half of the bitcoin in its emergency user fund to help cover losses from the roughly $6.3 billion hack. The exchange pledged to restore SAFU to about $1 billion but provided no timeline. Binance has said it has replaced 90% of the stolen crypto, according to CoinDesk. Kim Yo Jong, sister of North Korean leader Kim Jong Un, accused Washington of misleading public opinion by portraying cybercrimes around the world as the work of North Korea.
Why It Matters?
SAFU was created to reassure customers that their funds are protected in exactly this kind of event, so its depleted balance is a key test of trust in the world’s largest crypto exchange. With the fund below the level that its own rules treat as a top-up threshold, users and counterparties have less of a cushion if another loss occurs. The lack of disclosure on the insurance fund and the refill timeline leaves open how much of Binance’s backstop has actually been used.
What’s Next?
Watch for Binance to announce a timeline and funding source for restoring SAFU to $1 billion, and for on-chain data showing bitcoin flowing back into the published wallet. A further drop in bitcoin, which slipped below $77,000 on Tuesday, would reduce the fund’s dollar value even more. Recovery efforts are also moving forward, as Arbitrum’s Security Council moved about $30 million of hack-linked funds to a holding address last week.
