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

Binance introduced 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 Road investor Cathie Wooden publicly attributed current market weak point to a Binance-related deleveraging occasion.

The change pledged to take care of the fund’s worth at $1 billion by means of 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 because the October 10 crash, with critics throughout English and Chinese language-speaking communities demanding that the change use income to construct Bitcoin reserves and help the broader {industry}.

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

Cathie Wooden’s Remarks Ignite Pent-Up Group Anger

ARK Make investments founder Cathie Wooden appeared on Fox Enterprise on January 26, explaining Bitcoin’s current weak point by stating that “on October 10 final 12 months, Binance skilled a software program glitch that triggered large computerized deleveraging, forcing liquidations totaling roughly $28 billion.“

The remark from one in all Wall Road’s most distinguished Bitcoin advocates resonated throughout crypto communities, significantly as ARK had bought over $20 million in Coinbase inventory that very same week.

Binance co-founder He Yi shortly responded with a put up noting, “Cathie Wooden isn’t a Binance person. We don’t serve U.S. People or U.S. entities. No offense,” however deleted the message shortly after.

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

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

In line with BlockFlow evaluation, the criticism now ranges from operational considerations to critical accusations about platform administration, with some voices evaluating the state of affairs to earlier change failures.

Even rivals joined the criticism, with OKX founder Star Xu posting on January 28 that “the incident brought on actual and lasting harm 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 compelled liquidations throughout crypto markets, although analysts later clarified precise dealer losses represented simply 5% to fifteen% of that headline determine, translating to between $950 million and $2.85 billion in actual losses based on Kaia DLT Basis chairman Sam Website positioning.

Binance offered $283 million in compensation to affected customers, sustaining that its methods functioned as meant throughout what it described as excessive market situations.

Group 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 change’s early-stage token platform, the place critics declare most listed tasks comply with patterns of sharp preliminary features adopted by steep declines.

Consumer-generated statistical analyses recommend that 9 out of 10 Alpha tokens fail to take care of worth, main some to query whether or not listings present unfair benefits to insiders whereas retail consumers soak up losses.

Change 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 belongings throughout 38,648 instances, prevented $6.69 billion in potential rip-off losses by aiding 5.4 million customers, and collaborated with international legislation enforcement to fight unlawful actions involving $131 million.

The change maintained proof-of-reserves overlaying roughly $162.8 billion throughout 45 crypto belongings 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’re a big internet hoarder.“

He famous the change operates beneath international regulatory oversight that may overview each commerce on each account.

Regardless of platform-specific controversies, broader institutional sentiment stays constructive.

A current Coinbase Institutional and Glassnode survey of 148 international traders discovered 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.

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

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