Bitget Rolls Out $200M ‘Protection Fund’ to Safeguard User’s Crypto
The Singapore-based exchange is hoping the fund will help boost its profile and restore trust in the community by insuring against hacks
Singapore; Source: Shutterstock
key takeaways
- Bitget wants to shore up trader and investor confidence with a new “protection fund”
- Bitcoin and tether will make up the exchange’s war chest, currently worth more than $200 million
Singapore-headquartered crypto derivatives exchange Bitget said Sunday it has launched a new fund designed to safeguard against hacks and theft — a bid to lift the industry’s image after crypto’s recent downturn.
The exchange’s $200 million-plus “Protection Fund,” which consists of 6,000 BTC ($140.2 million) and 80 million USDT, is an attempt to quell security concerns and boost investor confidence, Bitget said.
Recent market turmoil, fueled by lender contagion that caught many industry participants by surprise, has battered faith in crypto’s ability to weather significant periods of volatility.
Multiple lenders and exchanges moved to restrict or freeze crypto asset withdrawals from their platforms following revelations they didn’t have the capital on hand to satisfy users who wished to opt-out of the market.
Coupled with billions of dollars lost to hacks and theft last year, trust in the crypto community alongside the platforms storing users’ assets continues to erode.
Part of the fund’s stablecoin allocation is meant to help alleviate pressures associated with market volatility, Bitget said.
The exchange, established in 2018, is one of South-East Asia’s fastest growing derivatives exchanges boasting around 20,000 active traders. Bitget processed close to $100 billion in transactional value in 2021, according to its LinkedIn profile.
Bitget has pledged to secure the value of its war chest over a three-year horizon. It’s expected to be self-funded and non-reliant on third-party insurance in what it believes will help navigate beyond “external bureaucracy” or “policy changes.”
“The protection fund will help us mitigate investors’ concerns and attract potential users,” Bitget’s managing director Gracy Chen said in a statement. “We believe our initiative would encourage other CEXs [centralized exchanges] to address concerns of accountability … and help win back investors’ confidence.”
The move echoes Binance’s decision to establish its so-called “Secure Asset Fund” in 2018, which came in handy when hackers raided the exchange for $40 million in the following year.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: Unpacking crypto and the markets.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
