CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$27,222.00
  • ethereum
    ETH$1,904.52
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Opinions
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » How Could Exchanges Protect Against Hacks, Meet ‘SAFU’ From Binance

    How Could Exchanges Protect Against Hacks, Meet ‘SAFU’ From Binance

    Author: Toju Ometoruwa

    Last Updated Jul 5, 2018 @ 13:42

    A bizarre incident occurred on Binance yesterday that left many traders confused and concerned for the safety of their funds.  A single Syscoin (a cryptocurrency worth about $0.25 and ranked #74 on coinmarketcap) was purchased for 96 Bitcoin (or about $615,000). The trade alerted the companies risk management system, which upon further analysis, discovered that it was caused by a number of API users.

    Binance halted all trading and withdrawals and also removed all API keys until the situation could be resolved.  It was later revealed that the irregular trade was caused by Syscoin’s blockchain becoming temporarily jeopardized.

    This irregularity prompted Binance to offer a 70% rebate on the trading fees received between July 5th and July 14th to all Binance users, and to launch a user safety fund called “Secure Asset Fund For Users (SAFU).

    The statement put out by Binance’s support team states:

    “To protect the future interests of all users, Binance will create a Secure Asset Fund for Users (SAFU). Starting from 2018/07/14, we will allocate 10% of all trading fees received into SAFU to offer protection to our users and their funds in extreme cases. This fund will be stored in a separate cold wallet.”

    Binance is receiving praise for their quick response and the launch of SAFU (a name ironically derived from a popular meme video about Binance’s security). Their response also leads to questions about what the standard should be for crypto exchanges providing some form of insurance in case of lost funds due to hacks or irregular trades.

    SAFU

    Large US based exchanges like Coinbase and Gemini state on their website that only US dollars are FDIC insured (for up to $250,000). Currently, the U.S. government does not provide insurance for any digital assets, which means as soon as you convert any sum of money from fiat to crypto, it is no longer insured by those exchanges.

    Furthermore, the few exchanges that have a concrete insurance policy offer very limited cases to make a claim. Insurance is primarily for cases where an exchanges systems are hacked due to no security fault of their own. User who have poor quality passwords and don’t properly follow basic security protocols will most likely not be insured.

    The crypto space is still highly unregulated and the frequent news of hacks has made many insurers reluctant to cover exchanges. South Korea in particular has had more than its fair share of exchange  hacking incidents, prompting local insurance to cast doubts on their credibility and security.

    Currently, only 4 exchanges in South Korea offer insurance; Upbit, Korbit, Bithumb, and Coinone. However the insurance limits on these exchanges are less than $5million, with is barely enough to cover users in the case of a serious hacking incident.  

    It remains to be seen how exchanges will resolve the lack of trust from Insurers. Binance has wisely chosen to take on the costs of insurance by allocating 10% of their trading fees to SAFU. As insurance companies continue to deliberate on the risks of covering crypto exchanges, it may benefit the exchanges to follow Binance’s example and take on the burden of insuring themselves in order to build more confidence and loyalty from traders.

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.

    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

  • bitcoin
    BTC$27,222.00
  • ethereum
    ETH$1,904.52
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    The Weaknesses of Ethereum VS Modern Blockchains: Interview With Radix

    The Weaknesses of Ethereum VS Modern Blockchains: Interview With Radix

    Institutions Intend to Buy Bitcoin in Late 2023: Interview With CryptoQuant

    Institutions Intend to Buy Bitcoin in Late 2023: Interview With CryptoQuant

    Why Didn’t ETH Dump After Shanghai? Interview With Nansen

    Why Didn’t ETH Dump After Shanghai? Interview With Nansen

    What is PEPE Coin? Is This the Next Huge Memecoin?

    What is PEPE Coin? Is This the Next Huge Memecoin?

    What is the Ethereum Shanghai (Shapella) Upgrade? Everything You Need to Know

    What is the Ethereum Shanghai (Shapella) Upgrade? Everything You Need to Know

    15 Months Later, What Changed Since November 2021? Interview With Phantom Wallet CEO

    15 Months Later, What Changed Since November 2021? Interview With Phantom Wallet CEO

    Artificial Intelligence & Crypto Guide: Here Are the Top 5 AI Coins

    Artificial Intelligence & Crypto Guide: Here Are the Top 5 AI Coins

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    Footer Logo
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers
    Editorial Policy
    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!