$200M BitGet BTC-USDT protection fund hints at investor-centric trend
With the ultimate goal to regain investor confidence amid a prolonged bear market, crypto derivatives exchange Bitget launched a $200 million fund to safeguard users’ assets. Bitget joins the growing list of crypto companies, such as Binance, that have taken an investor-centric approach to gain investors’ trust via protection funds.
The Bitget Protection Fund comprises 6,000 Bitcoin (BTC) and 80 million Tether (USDT), valued at $200 million at the time of writing. Considering the fact that crypto winter currently shows almost no signs of slowing down, Bitget pledged to secure the value of the fund for the next three years.
While Bitget chose to self-fund the entire protection fund without relying on a third-party insurance policy, Binance set up its user protection insurance fund, Secure Asset Fund for Users (SAFU), by allocating 10% of the trading fee. Starting off in 2018, SAFU reached a $1 billion valuation by early 2022. Sharing details about the newly founded fund, Gracy Chen, managing director of Bitget, added:
“The protection fund will help us mitigate investors’ concerns and attract potential users. As we continue to endure the crypto winter, it is crucial that our users can rest assured that their funds are kept safe.”
Bitget’s reasoning behind using a combination of stablecoin and BTC in the protection fund is to counter massive unforeseen volatility in crypto markets. Further safeguarding investors, Bitget implemented stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) policies to disallow bad actors from using its services.
Related: Voyager can’t guarantee all customers will receive their crypto under proposed recovery plan
Soon after filing for bankruptcy, crypto lending firm Voyager Digital revealed that it might not be able to reimburse all of its customers under the proposed recovery plan.
We understand how critical it is to get access to the value in your account and we are working through this process as quickly as possible to do just that. Today’s post provides an update on customer cash and crypto, and next steps: https://t.co/yBlVB0qgVp (1/6)
— Voyager (@investvoyager) July 11, 2022
Upon court’s approval, Voyager’s proposed recovery plan involves reimbursing users’ funds worth roughly $1.3 billion in a combination of Voyager tokens, cryptocurrencies, “common shares in the newly reorganized company,” and funds from any proceedings with Three Arrows Capital (3AC).
“The plan is subject to change, negotiation with customers, and ultimately a vote […] We put together a restructuring plan that would preserve customer assets and provide the best opportunity to maximize value.” said the lending firm.