A Comparison of FTX Is Made by the Analyst

Willy Woo, a well-known on-chain analyst, issued a critical tweet about Binance's Secure Asset Fund for Users (SAFU) insurance fund earlier today, on November 25, 2022. The date was November 25, 2022.

According to him, it is rather irresponsible, from a safety point of view, to have about a whopping 44% of the entire SAFU insurance fund supported by BNB. This is because of the risk that this presents.

He went on to explain that the SAFU insurance fund has currently accumulated BNB $367 million, which accounts for approximately 44% of the total amount. In addition to this, the fund only has approximately $270 million worth of bitcoin, but it has a massive amount of Binance's stablecoin, which is worth approximately $300 million.

Willy Woo praised the cryptocurrency exchange for its initiative to establish such a fund, but he did not see the need for the fund to be backed in any way, shape, or form by BNB, let alone a significant percentage of 44 of the total.

Willy Woo continued to vent his ire by making a comparison between the situation at Binance's SAFU insurance fund, which is largely backed up by BNB, and the situation at FTX, which created an issue fund and had it largely filled with its tokens, FTT. He stated that the situation at Binance was analogous to the situation at FTX. He thought it was foolish and said that an endeavor of this nature made no sense to him.

It's Possible That Binance's SAFU Will Fall – Woo

Willy Woo reminded those in the industry that, in point of fact, on November 9th, Binance had contributed approximately $700 million worth of BNB and BUSD tokens to the SAFU fund in addition to a meager $300 million worth of bitcoin. This was done to support Willy Woo's argument.

However, the analyst has brought to people's attention the fact that the fund's value has dropped to approximately $837 million as a result of the current state of the market.

Willy Woo pointed out that the SAFU fund faces a significant possibility of experiencing a precipitous decline in value in the event that the market condition continues to deteriorate. Willy stated that it simply did not make any sense for it to back up the SAFU fund given that the exchange, Binance itself, is the factor that determines the stability of the price of the BNB.

The price of BNB has decreased by approximately 1%, and it is currently being traded at a price of $296. As if to prove a point, the price of BNB has gone down.