The expansion of the cryptocurrency market and the huge volumes traded attract more and more malicious actors. On a recurring basis, there are cryptocurrency protocols, platforms and exchanges being hacked, with millions of crypto assets being drained.
With that in mind, Binance, one of the largest exchanges in the world by volume traded, announced the creation of an insurance fund for its users. The fund is valued at $1 billion based on the January 29 price.
Binance Secure Asset Fund
According to a platform memo accessed by Bloomberg News, Binance has been putting money into the emergency reserve since July 2018. Now, the company has decided to consolidate the funds into one place, the Binance Secure Asset Fund.
As the CEO of Binance highlighted, Changpeng Zhao, the CZ, the fund’s value provides effective protection:
“At Binance, we’ve always said ‘the funds are safe’. And today the size of the Binance Secure Asset Fund acts as an effective hedge as well as protection for users against these unlikely issues,” CZ said in the memo.
Hacker attacks on the crypto market
Binance’s move is announced less than two weeks after the hack of popular cryptocurrency exchange Crypto.com.
According reported by Cryptheory, on January 20 the exchange confirmed the loss of 4,836.26 ETH, 443.93 BTC and about $66,200 in other cryptocurrencies.
The total stolen, considering quotations at the time of the invasion, was valued at US$ 33.9 million.
According to the exchange, this amount was stolen from 483 users who had unauthorized withdrawals from their accounts. Crypto.com stated that these people will be reimbursed through a new fund created by the platform.
In addition to the exchange, numerous decentralized finance (DeFi) protocols, including some based on the Binance Smart Chain (BSC), have already been targeted by hackers.
The most recent case was the hack to the DeFi Qubit Finance project, based on the BSC.
The exploitation resulted in a loss of US$ 80 million to users of the platform. According to the website DeFiYield Rekt this is the seventh largest exploit in DeFi in terms of stolen value.