Binance Builds Up $1 Billion Insurance Fund Amid Crypto Hacks By Bloomberg

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Binance Builds Up $1 Billion Insurance Fund Amid Crypto Hacks

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© Bloomberg. The Binance Markets Ltd. cryptocurrency exchange trading app arranged on a smartphone in London, U.K., on Monday, June 28, 2021. Binance Markets Ltd., an affiliate of top global crypto bourse Binance, was told by the Financial Conduct Authority it has until the evening of June 30 to confirm it has removed all advertising and financial promotions, according to the authority’s register. Photographer: Jason Alden/Bloomberg 2/2

(Bloomberg) -- Binance Holdings Ltd. has built up a $1 billion insurance fund for its users amid a barrage of hacks on cryptocurrency trading platforms, according to a memo.

Binance, the world’s largest crypto exchange by trading volume, has been earmarking money for the emergency portfolio since July 2018 and just recently consolidated the funds into one place. The effort marks an attempt to combat concerns from users following a string of cyberattacks, including one at Binance in 2019.

Earlier this month, Crypto.com said customer accounts that held about $34 million in cryptocurrencies and cash were hit by unauthorized withdrawals. Hackers seized more than $80 million of digital assets from a blockchain extension by Qubit Finance last week.

“At Binance we always said ‘funds are safe,’ and today the Binance Secure Asset Fund size acts as an effective safeguard as well as protection for users against such unlikely issues,” Chief Executive Officer Changpeng “CZ” Zhao said in the memo seen by Bloomberg News.

The fund was valued at $1 billion based on the opening price on Jan. 29.

READ MORE: World’s Biggest Crypto Fortune Began With a Friendly Poker Game

Cybersecurity breaches have become ubiquitous on cryptocurrency trading platforms, leaving investors frustrated and companies suspending services to fix network vulnerabilities. It’s a caveat of a system where transactions can only be traced to anonymous serial codes rather than personal identifications.

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