Binance Converts BUSD in SAFU Fund to USDT and TUSD

Binance’s SAFU fund now holds $100 million in USDT and $100 million in TUSD, having converted these amounts from BUSD.

Binance Converts BUSD in SAFU Fund to USDT and TUSD

On the evening of March 17, crypto exchange Binance announced its latest move to reduce exposure to BUSD, a stablecoin branded by Binance but recently targeted by US financial regulators.

Binance revealed that it has converted all BUSD in its SAFU (Secure Asset Fund for Users) into USDT and TUSD. The BEP-20 and ERC-20 wallet addresses provided by Binance show that the exchange now holds $100 million in USDT (BNB Chain version) and $100 million in TUSD (Ethereum version).

Additionally, Binance holds 1.3 million BNB (worth $456 million) in BEP-20 wallets and 16,277 BTC (worth $437 million) in Bitcoin wallets, bringing the total value of the SAFU fund to $1.093 billion.

Currently, the SAFU wallet addresses no longer hold any BUSD.

SAFU was established by Binance in 2019 following a $40 million Bitcoin hack. The fund is used to cover user losses resulting from trading and technical issues on the platform. In February 2022, Binance announced that SAFU’s value had reached $1 billion.

This recent move highlights Binance’s ongoing efforts to distance itself from BUSD, which has been under scrutiny. The SEC and New York regulators accused BUSD of being a security in February. Paxos, the issuer of BUSD, has been instructed to cease minting new BUSD and can only redeem BUSD for USD until February 2024.

Binance CEO Changpeng Zhao (CZ) has acknowledged the legal restrictions and expressed readiness to abandon BUSD.

Since then, Binance has eliminated the automatic conversion feature for deposits into BUSD, reinstated crypto trading pairs with USDC and TUSD, and announced the conversion of its $1 billion market rescue fund into BTC, ETH, and BNB.

Furthermore, Binance is now actively promoting TUSD, a stablecoin rumored to be associated with Justin Sun. In addition to opening TUSD trading pairs and converting BUSD in the SAFU fund to TUSD, the exchange has been observed issuing large amounts of TUSD and maintaining zero trading fees for BTC/TUSD pairs.

Read more: What is USDT?

Binance’s preference for TUSD has caused the value of TRU, a cryptocurrency historically linked to TUSD, to rise. However, Binance CEO CZ has denied any current connection between the two, leading to a decline in TRU’s price.

Since mid-February, BUSD’s market capitalization has dropped nearly 50%, from $16 billion to $8.5 billion at the time of writing, while TUSD’s market cap has increased from $1 billion to $2.1 billion over the same period.

Market Cap Fluctuations: BUSD vs. TUSD

BUSD Market Cap Trend (Past 3 Months)
Source: CoinMarketCap, March 17, 2023, 08:45 PM

TUSD Market Cap Trend (Past 3 Months)
Source: CoinMarketCap, March 17, 2023, 08:45 PM