Binance Replaces BUSD With TUSD, USDT
Binance said on March 17 that it had replaced BUSD holdings in the Secure Asset Fund for Users (SAFU) with TrueUSD (TUSD) and Tether (USDT). This is in response to Paxos’s recent decision to stop making new Binance USD (BUSD), which has caused the market capitalization of BUSD to go down over time.
As Paxos will no longer be minting new BUSD, #Binance has swapped the BUSD in the SAFU Fund for TUSD & USDT.
This change will have no impact on users, and the funds remain on publicly verifiable addresses.
Funds are SAFU.https://t.co/edLVgpdCUQ
— Binance (@binance) March 17, 2023
The crypto exchange set up the Secure Asset Fund for Users (SAFU) in July 2018 as an emergency insurance fund to protect users’ funds in case of security breaches or other unplanned events. Binance set aside a certain amount of trading fees to grow the fund, which was worth $1 billion as of January 29, 2022.
Binance Coin (BNB), Binance USD (BUSD), and Bitcoin (BTC) were the first things in the fund’s wallets. But Binance has decided to get rid of its BUSD holdings and replace them with TUSD and USDT.
New Changes Will Not Affect Binance Users
The crypto exchange has told its users that this change will have no effect on them and that their funds will still be held in addresses that anyone can check. The crypto exchange will also continue to work with BUSD. The exchange also said that it will keep a close eye on the fund to make sure it has enough money in it, and that it will add to it as needed with its own money.
Crypto Community in Further Confusion
Binance Replaces BUSD With TUSD & USDT In SAFUPaxos Trust Company, which makes BUSD stablecoins, said on February 13 that it would stop making new BUSD stablecoins because New York regulators were still looking into the matter. Paxos stopped making new BUSD tokens on February 21, as directed by the New York Department of Financial Services and in coordination with them (NYDFS).
Days after news that US regulators were looking into Paxos and Binance USD, Binance made almost $50 million worth of TrueUSD (TUSD). Etherscan data shows that the transaction happened on February 16. It happened two days after Chanpeng “CZ” Zhao said in a Twitter Spaces post on February 14 that Binance would try to “diversify” its stablecoin holdings away from BUSD.
Since the U.S. Securities and Exchange Commission took action against Binance’s BUSD, some people in the crypto community have wondered if the real problem is stablecoins or Binance, since the SEC didn’t act against Paxos’ gold-backed stablecoin, Pax Gold (PAXG.)
This is an excellent point. Paxos has been specifically targeted for BUSD, but not their own Pax dollar.
Look at the bigger picture. FTX collapsed, & now suddenly the regulators are coming after Binance.
It's almost as if a co-conspirator of Binance is informing on them. https://t.co/FhkrntttlK
— Cryptohippo (@cryptohippo65) February 13, 2023
