Crypto Exchange Binance Builds $1B Insurance Fund After Industry’s Recent Hacks
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.
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.
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.