Binance announced that it would convert its $1 billion stablecoin SAFU fund into Bitcoin reserves within 30 days, in response to growing community criticism that intensified after prominent Wall Street investor Cathie Wood publicly attributed recent market weakness to a Binance-related deleveraging event.
The exchange has committed to maintaining the fund’s value at $1 billion through regular rebalancing and replenishing it with more Bitcoin if price fluctuations push the fund below $800 million.
The move comes as Binance faces the biggest challenge to its reputation since last October 10’s collapse, with critics in the English-speaking and Chinese communities demanding that the platform use its profits to build Bitcoin reserves and support the industry as a whole.
Although Binance has faced criticism since its inception, the current backlash has significantly intensified after Wood’s TV appearance and has expanded to include concerns over the quality of token listings, market structure, and transparency of the platform.
Cathie Wood’s statements fuel pent-up societal anger
Cathie Wood, founder of ARK Invest, appeared on Fox Business on January 26, explaining Bitcoin’s recent weakness by saying that ” On October 10 last year, Binance experienced a software glitch that resulted in a massive automatic leverage reduction, leading to liquidations totaling approximately $28 billion. “.
The comment from one of the most prominent Bitcoin proponents on Wall Street resonated widely in cryptocurrency communities, especially since ARK had purchased shares of Coinbase worth more than $20 million that same week.
Binance co-founder He Yi quickly responded with a message noting: “ Cathie Wood is not a Binance user. We do not serve U.S. persons or entities. I don’t want to offend “But he deleted the post shortly after.
This deletion appears to reflect an internal realization that this statement opened the door to a build-up of frustrations three months ago.
Wood’s comment sparked anger that had been building since October, when Binance’s limited public explanation of the outage left many users dissatisfied.
According to BlockFlow’s analysis, criticism now ranges from operational concerns to serious accusations about the platform’s management, with some voices comparing the situation to the failure of previous trading platforms.
Even competitors joined in the criticism, with OKX founder Star Show posting on January 28 that “ The accident caused real and lasting damage to the industry “, although he avoided directly naming Binance.
Critics focus on October crash and inclusion of digital currencies
The October 10 event saw approximately $19 billion in forced liquidations in cryptocurrency markets, although analysts later clarified that traders’ actual losses were only 5-15% of the overall figure, translating to between $950 million and $2.85 billion in actual losses according to Sam Siu, president of the Kaia DLT Foundation.
Binance offered $283 million in compensation to affected users, saying its systems worked as expected in what it described as extreme market conditions.
Community frustration is partly focused on this payment, which represents around 1% of total liquidations, with lingering questions about system vulnerabilities and market maker activity.
Technical issues during periods of extreme volatility left users unable to manage orders, while system overloads, quote errors and asset disconnections contributed to the chaos.
Separate controversies surround Binance Alpha, an early-stage token platform, with critics claiming that most of the projects listed follow patterns of sharp initial gains followed by sharp declines.
User-led statistical analyzes indicate that 9 out of 10 alpha tokens fail to maintain their value, leading some to question whether listings provide unfair advantages to insiders while individual buyers bear the losses.
Trading Platform Commits to Bitcoin Reserves Amid Institutional Optimism
Binance outlined its 2025 accomplishments in its open letter accompanying the SAFU announcement, noting that it recovered $48 million in improperly deposited assets in 38,648 cases, avoided $6.69 billion in potential fraud losses by assisting 5.4 million users, and cooperated with global law enforcement to combat illegal activities involving $131 million.
The exchange maintained proof of reserves covering approximately $162.8 billion across 45 crypto asset types while listing projects on 21 public blockchains.
Founder Changpeng Zhao spoke of what he described as “ Misinformation and intimidation “Regarding recent comments in the market, emphasizing that” Binance only transfers a portion of its revenue to cover expenses. It’s a big business when it comes to capital accumulation “.
FUD does not harm the target. My subscribers have increased.
FUD hurts the market (i.e. everyone).
I/Binance does not sell significant quantities.
My sale = I swipe my card and $5 of BNB is converted/cent at the cafe.
I no longer run Binance, but from what I…—CZ
BNB (@cz_binance) January 30, 2026
He emphasized that the exchange operates under global regulatory oversight that can review every trading transaction on every account.
Despite the controversy surrounding the platforms, the broader institutional trend remains constructive.
A recent survey of 148 global investors by Coinbase Institutional and Glassnode showed that 70% of institutions view Bitcoin as undervalued despite its drop from over $125,000 to around $90,000, while 62% of institutions have maintained or increased their allocations to cryptocurrencies since October.
Furthermore, a survey conducted by Bitwise and VetaFi revealed that 32% of financial advisors allocated part of their investments to cryptocurrencies in client accounts in 2025, compared to 22% in 2024.
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