Following the consecutive lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase, two major cryptocurrency exchanges in terms of trading volume, the entire crypto market experienced a decline last week.
This downward trend has affected the size of Binance’s Secure Asset User Fund (SAFU). Established by the exchange in July 2018, SAFU serves as an emergency fund to safeguard user assets in the event of theft or hacking incidents. Starting June with a value close to $950 million, the fund’s assets have now diminished to approximately $861 million, reflecting a 10% decrease.
Based on blockchain addresses disclosed by Binance, the majority of SAFU comprises Bitcoin (BTC) and Binance’s native token, BNB. Since the SEC’s legal actions were initiated, both Bitcoin and BNB have experienced declines in value, with BTC down by approximately 6% and BNB down by approximately 20%.
A spokesperson for Binance told the Wall Street Journal that the firm’s emergency fund is regularly reviewed and topped up with new capital when needed. One such example was in November 2022, when Binance replenished the fund from $735 million to $1 billion after rival exchange FTX’s meltdown caused crypto assets to crater.