Bitrue now holds over 41M XRP in addition to 40M Bitrue Coin (BTR) as insurance funds to safeguard users’ assets in the event of a security breach.
The cryptocurrency scene has been riddled with debacles this year, leading to losses in investor funds. Against this backdrop, Singapore-based cryptocurrency exchange Bitrue established an insurance policy to safeguard its users’ assets. A recent update indicates that Bitrue’s insurance assets now include 41M XRP and 40M Bitrue Coin (BTR).
In the wake of the recent FTX situation, Bitrue thought it necessary to reiterate its unique approach to safeguarding investors’ assets by providing an update on its insurance policy and the funds available to fulfill its insurance obligation in the event of an “unlikely” security breach.
“Bitrue has always prioritized the safety and security of our user assets. We are the first crypto exchange to establish an insurance fund to safeguard your assets,” the exchange remarked in a tweet Wednesday amidst the FTX insolvency saga.
Bitrue has always prioritized the safety and security of our user assets. We are the first crypto exchange to establish an insurance fund to safeguard your assets.https://t.co/mfwJHpjhKm pic.twitter.com/IhPELcVHOV
— Bitrue (@BitrueOfficial) November 9, 2022
Bitrue further decided to share links to two different wallets with the assets it plans to use as insurance funds, which contain approximately $17.2M against prevailing rates.
The first wallet holds about 41M XRP tokens, valued at $15.6M against the current rate. However, the second wallet holds a total of 40M BTR, worth about $1.6M. Bitrue’s decision to reserve these assets as insurance funds indicate its commitment to customer protection, supposing its obligations are met when situations get ugly.
Two years ago, Bitrue became one of the first cryptocurrency exchanges to provide a fully transparent insurance fund policy with funds made public for auditing any interested individual. The exchange launched its insurance wallet, which had 15M XRP and 40M BTR upon launch.
The XRP wallet has been periodically topped up over the years to increase insurance funds. In two years, the amount of XRP has risen by 173% to 41M tokens. This is due to Bitrue’s promise to ensure that, at all times, its insurance funds are greater in value than what it holds in its hot wallets.
As part of its latest efforts to assuage any doubt about its solvency amongst customers, Bitrue further disclosed that it does not and will not engage in any risky hedge funds. Additionally, the exchange noted that it would not be lending and collateralizing its token (BTR) – a move that would create substantial risks, as illustrated with Alameda and other entities.
Conclusively, Bitrue disclosed that it does not have any material exposure to Alameda Research or FTX, quenching any concerns of damaging effects should the FTX situation develop to what was noticed with Terra, 3AC, and Celsius.
Amidst these incidences of fiascos that have led to losses in investor funds, most proponents seek reassurance that their funds are safe.
Binance recently topped up its insurance funds, dubbed “Secure Asset Fund for Users” (SAFU), to maintain the $1B target due to recent price fluctuations. Like Bitrue, Binance has two reserve accounts that hold its insurance funds. The first address holds $700M in Binance USD (BUSD) and BNB, while the second contains $300M in BTC.
Binance launched the SAFU initiative in 2018 to protect investors’ funds against any security breach. In January, the exchange announced that it would update the funds to $1B.
Meanwhile, FTX US has made claims of an insurance policy on customers’ cryptocurrency funds with the Federal Deposit Insurance Corporation (FDIC). Notwithstanding, in August, the FDIC issued a cease and desist order to the exchange along with four other crypto entities. According to the FDIC, it does not insure crypto funds on FTX US, demanding that the exchange desists from making such claims.