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Binance Converts $1B SAFU Fund to Bitcoin Following Criticism — Is a Rally Coming?

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Binance announced it would convert its $1 billion SAFU fund from stablecoins to Bitcoin reserves inside 30 days, responding to mounting group criticism that intensified after distinguished Wall Street investor Cathie Wood publicly attributed current market weak spot to a Binance-related deleveraging occasion.

The alternate pledged to keep the fund’s worth at $1 billion by common rebalancing, replenishing it with further Bitcoin if value fluctuations push the fund under $800 million.

The transfer comes as Binance faces its most important reputational problem for the reason that October 10 crash, with critics throughout English and Chinese-speaking communities demanding that the alternate use income to construct Bitcoin reserves and help the broader {industry}.

While Binance has confronted criticism since its inception, the present backlash escalated dramatically after Wood’s tv look and has expanded to embody considerations about token itemizing high quality, market construction, and platform transparency.

Cathie Wood’s Remarks Ignite Pent-Up Community Anger

ARK Invest founder Cathie Wood appeared on Fox Business on January 26, explaining Bitcoin’s recent weakness by stating that “on October 10 final yr, Binance skilled a software program glitch that triggered large automated deleveraging, forcing liquidations totaling roughly $28 billion.“

The remark from considered one of Wall Street’s most distinguished Bitcoin advocates resonated throughout crypto communities, notably as ARK had purchased over $20 million in Coinbase stock that very same week.

Binance co-founder He Yi rapidly responded with a publish noting, “Cathie Wood isn’t a Binance consumer. We don’t serve U.S. Individuals or U.S. entities. No offense,” however deleted the message shortly after.

The deletion appeared to sign inside recognition that the comment had opened floodgates to gathered frustrations relationship again three months.

Wood’s remark tapped into anger that had been constructing since October, when Binance’s restricted public explanations in regards to the crash left many customers dissatisfied.

According to BlockFlow analysis, the criticism now ranges from operational considerations to critical accusations about platform administration, with some voices evaluating the scenario to earlier alternate failures.

Even opponents joined the criticism, with OKX founder Star Xu posting on January 28 that “the incident brought on actual and lasting injury to the {industry},” although he averted naming Binance instantly.

Criticism Concentrates on October Crash and Token Listings

The October 10 occasion noticed roughly $19 billion in pressured liquidations throughout crypto markets, although analysts later clarified precise dealer losses represented simply 5% to 15% of that headline determine, translating to between $950 million and $2.85 billion in actual losses in accordance to Kaia DLT Foundation chairman Sam Seo.

Binance provided $283 million in compensation to affected users, sustaining that its methods functioned as meant throughout what it described as excessive market circumstances.

Community frustration facilities partly on this compensation, which represents roughly 1% of complete liquidations, with questions persisting about system vulnerabilities and market maker exercise.

Technical failures throughout excessive volatility prevented customers from managing orders, whereas system overloads, pricing show errors, and asset depegging contributed to the chaos.

Separate controversies encompass Binance Alpha, the alternate’s early-stage token platform, the place critics claim most listed tasks comply with patterns of sharp preliminary positive aspects adopted by steep declines.

User-generated statistical analyses counsel that 9 out of 10 Alpha tokens fail to keep worth, main some to query whether or not listings present unfair benefits to insiders whereas retail patrons take up losses.

Exchange Commits Bitcoin Reserves Amid Institutional Optimism

Binance detailed its 2025 achievements in its open letter accompanying the SAFU announcement, noting it recovered $48 million in misdeposited property throughout 38,648 instances, prevented $6.69 billion in potential rip-off losses by aiding 5.4 million customers, and collaborated with world legislation enforcement to fight unlawful actions involving $131 million.

The alternate maintained proof-of-reserves protecting roughly $162.8 billion throughout 45 crypto property whereas itemizing tasks throughout 21 public blockchains.

Founder Changpeng Zhao addressed what he termed “twisted FUD” round current market commentary, emphasizing that “Binance solely converts a portion of their income to pay for expense. They are a giant web hoarder.“

He famous the alternate operates beneath world regulatory oversight that may assessment each commerce on each account.

Despite platform-specific controversies, broader institutional sentiment stays constructive.

A current Coinbase Institutional and Glassnode survey of 148 world buyers found 70% of establishments view Bitcoin as undervalued regardless of its drop from above $125,000 to round $90,000, whereas 62% of establishments maintained or elevated crypto allocations since October.

Separately, a Bitwise and VettaFi ballot found 32% of economic advisors allotted to crypto in consumer accounts throughout 2025, up from 22% in 2024.

The publish Binance Converts $1B SAFU Fund to Bitcoin Following Criticism — Is a Rally Coming? appeared first on Cryptonews.

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