USDBinance Converts $1 Billion SAFU Fund to Bitcoin as Exchange Details October $19 Billion Liquidation Cascade
Exchange cites macro shock behind historic deleveraging while shifting user protection reserves into BTC
TL;DR
- Binance is converting its roughly $1 billion SAFU user protection fund entirely into Bitcoin over 30 days.
- The exchange says an October liquidation event totaling about $19 billion was driven by macro conditions, not platform failure.
- Binance outlined post-incident safeguards as scrutiny persists despite the reserve move.
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Binance said on January 30, 2026, that it is converting its Secure Asset Fund for Users into Bitcoin, shifting roughly $1 billion in reserves away from stablecoins and into BTC over a 30-day period. The exchange said the SAFU balance would be restored if its value falls below $800 million. Binance described Bitcoin as the “core long-term asset of the crypto ecosystem,” positioning the reserve shift as a structural change to how user protection funds are held, with custody tied to regulated infrastructure in Abu Dhabi Global Market and on-chain balances available for verification.
The SAFU fund was launched in 2018 and was first deployed following a 2019 security breach involving about 7,000 BTC, which Binance covered without impacting user balances. At current crypto price levels, the conversion implies the acquisition of more than 12,000 BTC. Binance disclosed that its year-end 2025 proof-of-reserves showed approximately $163 billion in user assets backed across 45 tokens, alongside disclosures that security teams helped prevent roughly $6.7 billion in scam losses and recovered $48 million from incorrect deposits during the year.
The reserve announcement followed renewed attention on a sharp market selloff on October 10, 2025, when crypto derivatives markets recorded about $19 billion in liquidations across major venues. Binance said the event was caused by a “macro shock — not an exchange failure,” citing risk-off sentiment tied to global market conditions. According to the exchange, roughly 75% of liquidations occurred before any internal system degradation, with long positions accounting for the majority of forced closures during the cascade.
Exchange-level data released after the incident showed long liquidations of about $1.39 billion on Binance and short liquidations of roughly $965 million during the same window, while other platforms recorded larger totals. Binance acknowledged temporary asset transfer disruptions and abnormal index price deviations involving USDe, WBETH, and BNSOL under thin liquidity. The exchange said index deviation thresholds and monitoring systems were adjusted following the event, alongside capacity upgrades to handle extreme volatility.
Industry reaction extended beyond Binance. Tron founder Justin Sun said he would increase his own Bitcoin holdings after the SAFU announcement, aligning publicly with the exchange’s BTC-centric reserve stance. Market observers noted that sentiment toward centralized exchanges remains mixed following the October selloff, even as Binance expands disclosures around reserves, security operations, and incident response.
The developments unfolded as broader market participants continued to track crypto price movements through composite benchmarks such as the crypto price index, amid fluctuations in crypto price levels and shifts in overall coin market cap following the October deleveraging event.
This article has been refined and enhanced by ChatGPT.
