Binance’s SAFU fund kept shifting its USDC reserves into BTC. The fund acquired another 1,315 BTC, just as the market price hovered above $76,000.
Binance’s new SAFU fund added another BTC transfer. Once again, the wallet bought 1,315 BTC, building up a total balance of 2.63K BTC. The wallet will absorb the exchange’s stablecoin reserves from the existing insurance fund.
As Cryptopolitan reported, the transfers are not market orders and have no potential to affect the price of BTC. The SAFU fund will be reordered to contain a larger BTC reserve instead of holding stablecoins.
Similar transactions may happen in the coming days, as Binance aims to transfer its $1B SAFU fund from stablecoins to Bitcoin by the end of the month. Binance also stated it is performing additional acquisitions of BTC, although the transfer came from the Binance 4 internal wallet. The new transfers happen at a much lower price for BTC, as the leading coin traded for $$76,248.05.
The SAFU fund originated in 2018 as an answer to attacks and market volatility, and is funded by trading fees. The fund will shift from a fixed to fluctuating value, but Binance has promised it would add more BTC if the total sum falls below $800M.
A decision to store funds in a fluctuating asset may be a signal for expected BTC appreciation from the recent cycle lows.
Binance battles insolvency rumors
The SAFU fund swaps happen as Binance is still battling insolvency rumors. The exchange still posts its usual proof of reserves, which is in excess of user positions. However, an episode of suspended withdrawals exacerbated the fears. Binance has already fixed the technical issues that prevented withdrawals.
For now, the question of Binance’s insolvency is seen as a form of FUD, and Changpeng ‘CZ’ Zhao himself denied the rumors of insolvency. Zhao additionally warned of fake images and dishonest claims.
Binance still carries 656,736 BTC in its total reserves, based on CryptoQuant data.
However, recently, the exchange withdrew 6,156 BTC within the span of a week from its usually idle cold wallet. The pace of withdrawals matches normal operations and has not shown signs of panic.
Binance is not losing reserves
In the past weeks, Binance increased its BTC reserves, driven by whale deposits. Unlike the FTX crash, there are no signs of mass withdrawals, and the alarming messages come from a limited number of social media influencers. The exchange retains its usual netflow of deposits and withdrawals.
BNB, the native token of BNB Chain, traded at $759.18, moving with the general market direction.
Any recent sell-offs may be linked to the market crash, with whale orders cashing out on BTC to avoid getting caught in a deeper drawdown. Over the years, Binance has survived multiple claims of insolvency or insufficient reserves, resorting to public wallets and regular audits to calm market fears.
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Source: https://www.cryptopolitan.com/binances-safu-fund-bought-another-1315-btc/
