Today in Crypto: US Sanctions, Bitcoin Slips, Binance SAFU Shift
U.S. Treasury sanctions on Iran-linked crypto exchanges, Bitcoin’s drop from the world’s top 10 assets by market capitalization, and Binance’s plan to re-denominate its $1 billion user protection fund into Bitcoin were the key developments affecting digital assets.
US Treasury sanctions Iran-linked crypto exchanges for first time
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced on Friday that it sanctioned two cryptocurrency exchanges connected to Iran’s financial system, the first direct action against digital asset platforms under its Iran sanctions program. The measures are part of a broader action targeting Iranian officials and networks accused of domestic repression and using alternative financial channels to evade international sanctions.
Bitcoin’s reversal this week pushed it out of the world’s 10 largest assets by market capitalization, following what market observers described as the cryptocurrency industry’s largest forced liquidation event on record. With Bitcoin trading around $83,000, its market capitalization declined to approximately $1.65 trillion, placing it 11th globally, behind Saudi Aramco and below Taiwan Semiconductor Manufacturing Co. (TSMC), according to market data trackers.
Gold has moved to the top position by a wide margin after a record-breaking rally, accompanied by strong growth in gold futures activity, according to recent data highlighted by cryptocurrency exchange MEXC. Bitcoin’s market value peaked near $2.5 trillion in October, when the price briefly exceeded $126,000. The latest downturn was driven by about $1.6 billion in long liquidations, as the price quickly fell to below $82,000 from near $90,000. The move has renewed concerns that the largest cryptocurrency could be at the start of a prolonged bear market.
Binance said it will shift the Secure Asset Fund for Users (SAFU) from stablecoin holdings into Bitcoin over the next 30 days, re-denominating the reserves into BTC. In an open letter, the exchange described the step as a reflection of its view that Bitcoin is a core long-term asset for the crypto ecosystem and said it will rebalance the fund back to $1 billion if market volatility reduces its value below $800 million. The change increases the fund’s exposure to Bitcoin price movements, raising questions about its capacity during a sharp drawdown if rapid user reimbursements are required.
Launched in 2018, SAFU is funded by a portion of Binance’s trading fees and is intended as an emergency reserve to compensate users in extreme cases, such as hacks or critical platform incidents. The spokesperson said losses covered by SAFU may include those incurred by users in the rare event of a platform security issue or other incident.
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