Binance Moves $1B SAFU User Protection Fund From Stablecoins To Bitcoin Shift

Binance plans to move its primary user protection fund from stablecoins into Bitcoin within the next 30 days, marking a major shift in how the exchange backs emergency safeguards. The transition will convert the Secure Asset Fund for Users (SAFU) entirely into Bitcoin, reflecting what company leadership describes as long-term confidence in Bitcoin’s role in the digital economy. Critics and industry observers warn that increased exposure to Bitcoin’s price volatility could weaken user protections during periods of market stress.

Binance Aligns SAFU With Bitcoin-First Vision for Crypto’s Future

SAFU functions as an insurance-style reserve that reimburses users in the event of rare incidents such as security breaches or major platform failures. Binance confirmed that the fund’s holdings will be converted from U.S. dollar–pegged stablecoins into Bitcoin and actively rebalanced. If market fluctuations push the fund’s value below $800 million, the exchange says it will use internal treasury reserves to restore it to its $1 billion target.

In a recent release, Binance said the decision reflects its view of Bitcoin as the core long-term asset of the digital economy rather than merely a trading instrument. Company leadership framed the move as aligning user protection reserves with what it considers the most durable asset in the crypto market.

The shift increases SAFU’s exposure to Bitcoin price movements. A sharp decline in BTC could reduce the fund’s value. At the same time, users may require prompt reimbursements following a data breach or insolvency. Binance acknowledged this risk but said it is prepared to intervene using treasury funds if necessary.

A Binance spokesperson said the exchange would continue to support the industry through periods of uncertainty. The company also said future reviews could include adding other “core assets,” such as BNB, to SAFU. Treasury reserves would again be used to cover any shortfall if the fund drops below its stated threshold.

User Protection Fund’s Bitcoin to Be Held in Licensed Clearing House

Launched in 2018, SAFU is funded by a portion of trading fees and held in cold wallets. The fund has been used in the past. In May 2019, hackers stole approximately 7,000 BTC—worth about $40 million at the time—from the platform. Binance said all affected users were fully reimbursed through SAFU, with no reduction to account balances.

Key details of the SAFU transition include :

• The fund will be fully converted to Bitcoin within 30 days.
• The target size remains $1 billion, with a lower trigger of $800 million.
• Treasury reserves will cover losses caused by market declines.
• Assets will be held under a regulated entity in Abu Dhabi.

Over time, SAFU has become central to Binance’s trust and risk-management strategy. Recent statements from the exchange emphasize that user assets are backed 1:1 and that SAFU remains segregated from operational funds.

The move follows a broader shift away from dollar-pegged exposure. In 2024, Binance transitioned SAFU holdings from BUSD to USDC after winding down its branded stablecoin, aiming to preserve liquidity while maintaining dollar linkage. The latest change removes stablecoins entirely and relies entirely on Bitcoin.

Binance currently holds more than 648,000 BTC across its platform, primarily to support trading activity and customer balances. Allocating roughly $1 billion to SAFU would add about 12,000 BTC at current prices, making it one of the largest Bitcoin-based reserve funds dedicated to user protection.

The exchange said SAFU’s Bitcoin will be custodied within its licensed clearing house, regulated by the Abu Dhabi Global Market. Users will be able to track the fund on-chain, and Binance expects the conversion process to be completed within a month.