Bitcoin plunge causes Binance to spend $13 million from user money insurance fund
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Answer Bitcoin plunge causes Binance to spend $13 million from user money insurance fund
The Binance platform is one of the platforms that are strongly present in the crypto market due to its liquidity and large trading volume.
Recently, Binance used $13 million to protect its users from leveraged liquidation on Binance Futures’ platform for futures and leverage.
It also informed the platform that it is adding an additional $30 million to its Leverage User Funds Insurance Fund.
$13 Million Spent to Protect Users in Bitcoin’s Recent Descent:
Binance Futures continues to position itself as the leading platform for trading bitcoin derivatives and alternative cryptocurrencies.
Binance Futures’ insurance fund is designed to protect users in times of extreme price volatility and automatic liquidation.
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Yesterday, Bitcoin lost about 20% of its value in less than 10 minutes as its price dropped from roughly $10,000 to around $8,000 before recovering to the current trading levels of $8,700.
During this time, $13 million was released from Binance’s insurance fund to protect users from liquidation.
On May 10, the fund had more than $21 million in USDT coins, and the following day, May 11, the figure was $7.7 million, meaning a shortage of nearly $13 million.
Binance Adds $30 Million To Its Fund:
In an official Twitter post, Binance told Binance that it intends to inject $30 million from the insurance fund to “support and continue to protect users.”
The #BinanceFutures The insurance fund used more than 13,000,000 USDT yesterday to protect users from ADL.
We will inject an additional 300,000,000 USDT . dollars In the insurance fund, plus $7,500,000 from April 30, to support and continue to protect our users. pic.twitter.com/cuHVH2JWWb
– Binance (binance) May 11, 2020
The importance of this money in the fund is that it is directed and dedicated to the trading community, as Bitcoin is characterized by being highly volatile and the recent 20% fluctuations reveal how high the volatility is, so in such times it is important to maintain appropriate mechanisms to protect traders.
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The purpose and benefit of this fund is not only directed to individual traders, but it also works to establish this activity as an industry to attract institutional investors as well.
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