Binance, the world’s largest cryptocurrency exchange, is currently converting billions of dollars of Safe User Asset Fund (SAFU) to USD Coin (USDC). This measure aims to strengthen user trust by utilizing a more stable and transparent stablecoin.
At the same time, Binance is preparing to re-enter the Indian and Dubai markets.
Why Binance Converted SAFU to USDC
Founded in 2018, SAFU serves as an emergency fund to protect Binance users in extreme situations. The SAFU fund, previously comprised of Bitcoin, Tether, True USD, and Binance’s own BNB, was essential to protect user assets from potential losses.
Notably, conversions to USDC now account for 3% of the stablecoin’s circulating supply.
Binance claims that through this transition it is adopting audited and transparent financial practices. This is especially important as the platform navigates a complex regulatory environment.
“Over the years, we have continued to monitor the size of SAFU to ensure it is balanced at an appropriate level to protect our users. Although there is variation, this level is typically set at $1 billion. SAFU is a core part of our responsibility to the ecosystem and continues to evolve to respond head-on to market conditions,” Binance explained.
Read more: Binance Review 2024: Is It the Right Crypto Exchange for You?
At the same time, Binance aims to re-establish its presence in India. The Economic Times reported that the cryptocurrency giant is negotiating its return after becoming one of nine cryptocurrency exchanges blocked by the Indian government in January for violating regulations.
In this comeback, Binance plans to reform its South Asian operations to become fully compliant with India’s Financial Intelligence Unit (FIU) and emphasize compliance with all relevant local regulations.
The reforms include imposing a $2 million fine as part of compliance efforts. Cryptocurrency exchanges will also address the initial gap, especially the problem of avoiding the 1% tax withheld.
The Economic Times also highlighted that Binance recorded approximately $4 billion in cryptocurrency holdings among investors at its peak. This return reflects the broader trend of cryptocurrency exchanges working to align with national financial guidelines, ensuring their services remain accessible and secure amid evolving regulatory frameworks.
Read more: Cryptocurrency regulation: what are the pros and cons?
Meanwhile, Binance successfully obtained a full cryptocurrency license in Dubai following a comprehensive regulatory review and adjustment of its corporate governance. This license was granted following a significant concession from Binance co-founder Changpeng Zhao. He agreed to give up his voting rights to Dubai-based Binance FZE.
This milestone allows Binance FZE to transition from an operational MVP license to a full Virtual Asset Service Provider (VASP) license, allowing it to serve a broader demographic, including retail investors.
The cryptocurrency exchange is also negotiating with various jurisdictions to finalize its global headquarters.
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