Binance has announced plans to convert its $1 billion Secure Asset Fund for Users (SAFU) entirely into Bitcoin within the next 30 days, marking a significant change in how the world’s largest crypto exchange structures its emergency user protection reserves.

The move signals Binance’s long-term confidence in Bitcoin as the foundational asset of the digital economy. However, critics warn that replacing stablecoin-backed reserves with Bitcoin could expose the fund to heightened volatility during periods of market stress.

What Is SAFU and Why It Matters

Launched in 2018, SAFU functions as an insurance-style reserve designed to reimburse users in rare events such as security breaches, hacks, or major system failures. The fund is financed by a portion of Binance’s trading fees and is held separately from the exchange’s operational assets in cold storage wallets.

SAFU has been used before. In May 2019, Binance suffered a major hack that resulted in the theft of roughly 7,000 BTC—worth around $40 million at the time. All affected users were fully reimbursed through SAFU, with no losses passed on to customer accounts.

Over time, the fund has become a central pillar of Binance’s trust and risk-management framework, reinforcing the exchange’s claim that user assets are backed 1:1 and remain segregated from company funds.

Details of the Bitcoin Transition

According to Binance, SAFU will be fully converted from U.S. dollar–pegged stablecoins into Bitcoin within a month. The exchange outlined several safeguards to manage volatility risk:

• Target fund size: $1 billion
• Lower trigger threshold: $800 million
• Backstop: Binance treasury reserves will be used to replenish SAFU if its value drops below the threshold due to market movements
• Custody: Assets will be held within Binance’s licensed clearing house regulated by the Abu Dhabi Global Market (ADGM)
• Transparency: The fund will remain publicly trackable on-chain

Binance emphasized that SAFU will continue to be actively monitored and rebalanced as needed.

Why Binance Is Going Bitcoin-First

In a recent statement, Binance described Bitcoin as the most durable long-term asset in the crypto ecosystem rather than merely a trading instrument. Company leadership framed the SAFU shift as aligning user protection with what it believes is the core asset of the digital economy.

This move also follows a broader retreat from dollar-pegged exposure. In 2024, Binance transitioned SAFU holdings from its now-defunct BUSD stablecoin to USDC to preserve dollar liquidity. The latest decision eliminates stablecoins from SAFU entirely in favor of Bitcoin-only reserves.

At current market prices, allocating $1 billion to SAFU would equate to roughly 12,000 BTC, making it one of the largest Bitcoin-denominated reserve funds specifically dedicated to user protection.

Binance currently holds more than 648,000 BTC across its platform to support trading activity and customer balances.

Risks, Criticism, and Future Changes

The primary concern raised by industry observers is Bitcoin’s price volatility. A sharp BTC downturn could temporarily reduce SAFU’s value at a time when users may need rapid reimbursement following a breach or platform failure.

Binance acknowledged this risk but reiterated that treasury reserves would be deployed immediately to cover any shortfall. The exchange also noted that future reviews may include adding other “core assets,” such as BNB, to SAFU, with treasury funds again acting as a safety net.

A Binance spokesperson stated that the exchange remains committed to protecting users and supporting the crypto industry through periods of uncertainty.