Regulation Articles - Binance Blog

Topping up SAFU to $1B

<img src="https://public.bnbstatic.com/image/cms/blog/20221109/d4397d75-5252-46f0-b0bf-31e6123629f4">Funds are SAFU. The <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://academy.binance.com/en/glossary/secure-asset-fund-for-users" customevents="[object Object]">Secure Asset Fund for Users (SAFU)</a> is an emergency insurance fund that was established in 2018 to protect Binance users in extreme situations. Over the years, we’ve continued to monitor SAFU’s size, maintaining the balance at a level adequate to safeguard our users.In January 2022, we announced that SAFU was worth $1B. Due to the recent market conditions, that value is now worth $735m. As of November 2022, we’ve topped the SAFU balance back to $1B.We made a promise to our user base, along with the larger crypto ecosystem, that SAFU would always maintain a sizable level. We’ll continue to uphold that promise and continue to build.Besides protecting user interests’, SAFU’s definition encompasses three essential components towards mass adoption: trust, integrity, and transparency. Retail traders and investors place a significant amount of trust in centralized crypto exchanges.This is why we called upon other centralized exchanges to follow our steps and publicly post their insurance wallet addresses. Users deserve to know if they are transferring their hard-earned money into a platform that employs adequate safety measures and is completely transparent with user funds.When users deposit their money on the Binance platform to use our products, they can rest assured we are fiscally responsible with those funds. Binance is not and has never acted as an investment firm or a hedge fund. We have heard from the community loud and clear that the industry needs to go beyond what is required. It’s our responsibility, as a collective, to ensure users feel comfortable in the crypto ecosystem.  Robust cybersecurity measures are only one part of the equation; the other part is a safety net that can mitigate as much damage as possible in the event of an emergency. Moving forward, SAFU will continue to be a core part of our responsibility to the ecosystem, and we will continue to evolve to meet market conditions head on. List of SAFU Wallet Addresses:<ul data-block-id="f02d869d-e2f3-4362-8455-848f7c5da75c"><li data-block-id="a712674c-ec93-4f19-aff7-e32bc78f0b2a">BTC: <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://blockchair.com/bitcoin/address/1BAuq7Vho2CEkVkUxbfU26LhwQjbCmWQkD" customevents="[object Object]">1BAuq7Vho2CEkVkUxbfU26LhwQjbCmWQkD</a></li><li data-block-id="fd1cfb89-f959-46c6-bc28-3b66fa5f2357">BNB and USDT (BEP20): <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://bscscan.com/address/0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa" customevents="[object Object]">0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa</a></li><li data-block-id="d98ee8c8-48c2-43ec-af42-ebdb92883baf">TUSD (ERC20): <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://etherscan.io/address/0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa" customevents="[object Object]">0x4B16c5dE96EB2117bBE5fd171E4d203624B014aa</a></li></ul>Article last amended: March 17, 2023

2022-11-09

Crypto Futures Basics: What Is Liquidation and How to Avoid It?

<h2 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;"></h2><h2 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;">Key Takeaways:</h2><ul style="padding-inline-start: 48px;" class=" list-paddingleft-2"><li>Leveraged positions are prone to volatile price swings, which may cause a trader’s equity to plunge into negative balance instantaneously and result in significant losses.</li><li>Liquidation mechanisms help prevent traders’ accounts from falling into negative equity.</li><li>Multiple strategies can be implemented to prevent liquidation, such as monitoring margin, using stop-losses or lowering the amount of leverage.</li></ul>Crypto derivatives have gained a lot of popularity over the years, attracting traders from all over the world to Binance Futures. Given the high volatility in the cryptocurrency market, these financial instruments can help increase traders' profits within a short period through the use of leverage. However, it is important to remember that there are also considerable risks associated with leveraged trading. One of the main factors to succeed in futures trading is strategizing each trade carefully and understanding how much capital is at risk. <img src="https://public.bnbstatic.com/image/cms/blog/20220217/26b3d64b-ca6f-462f-acdd-41a58e45c8d7.png"/>In <a href="https://www.binance.com/en/futures" target="_blank"><span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">futures trading</a>, where leverage is easily accessible, knowing how much capital and leverage is vested into a trade will help you understand your total risk exposure, because in some cases, losing trades can lead to liquidation.<h2 style="line-height:1.38;margin-top:18pt;margin-bottom:6pt;">What Is Liquidation in Crypto Futures Trades?</h2>The term liquidation is traditionally used to describe the conversion of assets into cash. But in futures trading, liquidation is something you want to avoid by all means. Leveraged positions are prone to volatile price swings, which may cause a trader’s equity to plunge into negative balance instantaneously. In such cases, losses can be more significant than the maintenance margin, leading to liquidation. This process is involuntary and automatic if a trade has come to meet specific price criteria. Liquidation can happen either slowly or quickly, depending on the amount of leverage used in a trade. For example, with lower amounts of leverage, liquidation won’t happen as soon as a minor correction occurs in the market. Nonetheless, higher amounts of leverage can deplete traders’ initial investment with little to no effort. <a href="https://www.binance.com/en/futures" target="_blank"><img src="https://public.bnbstatic.com/image/cms/blog/20220217/d02ccaf4-da5b-4089-9362-ae53864d68dd.png"/></a> <h2 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;">When Would Liquidation Occur?</h2>A forced <a href="https://www.binance.com/en/support/faq/7ba80e1b406f40a0a140a84b3a10c387" target="_blank"><span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">liquidation</a> process happens when a trader can no longer meet the margin requirements of their leveraged position.Let’s say you were to open a long BTC/BUSD leveraged position with $100 as your account balance. You used 20x leverage to enter a trade worth $2,000. If the price of BTC were to drop by only 5%, your account balance would be wiped out as you can no longer fulfill the margin call demands to keep the trade afloat. This is what is called liquidation in futures trading.<img src="https://public.bnbstatic.com/image/cms/blog/20220217/519c1f57-872d-49f7-9840-ef9faaf8b3ee.png"/>Although this is a basic example, it is crucial to know your limits and how much you’re willing to lose on a trade to understand how much leverage you should use. Binance Futures has introduced leverage limits on new accounts to protect users from the dangers and unintended consequences of using high leverage. It is imperative to fully understand the impact of leverage and the circumstances under which it can significantly damage the probability of a profitable trade. Read more about <a href="https://www.binance.com/en/support/faq/25edcd7fe0e544839d0847b8cbb2e400" target="_blank"><span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">how to reduce your chances of liquidation</a>. <h2 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;">Quick Tips to Prevent Liquidation</h2>To remain on the safe side, traders must have a plan in place with planned exits before entering any trade. There are multiple strategies that can be implemented to avoid risks, but you should consider the following to avoid liquidation. <h3 style="line-height:1.38;margin-top:16pt;margin-bottom:4pt;">1. Use Stop-Loss Orders </h3>The most obvious answer to avoid liquidation is simply using a stop loss. A stop loss is a trading tool Binance Futures offers, which allows traders to set a price to automatically exit a trade should the price of an asset hit this predetermined level. Using a stop loss in conjunction with a <span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">liquidation calculator,  can help protect a trader’s account from incurring significant losses, and especially from liquidation.Although you may still lose some funds, the stop loss tool will protect you from losing everything on a trade and from having to pay liquidation fees. Besides, who wants to lose and get penalized for it? By using a stop-loss, you can prevent this from happening. <h3 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;"><span style="font-size: 14pt; font-family: "IBM Plex Sans", sans-serif; color: #434343; font-weight: 400; font-variant-numeric: normal; font-variant-east-asian: normal; vertical-align: baseline; white-space: pre-wrap;">2. Decrease the Amount of Leverage</h3>Leverage has a significant impact on the longevity of a trade. While it may be enticing to use large amounts of leverage, it could also magnify your losses.As shown in the example above, the high amount of leverage can hurt a trader even when a small price change occurs. Thus, using lower leverage will help you navigate a volatile crypto market smoothly and safely. <h3 style="line-height:1.7999999999999998;margin-top:8pt;margin-bottom:8pt;">3. Monitor the Margin Ratio</h3>Another option that traders can implement is monitoring the <a href="https://www.binance.com/en/support/faq/360033162192" target="_blank"><span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">margin ratio</a>. When the margin ratio hits 100%, the position will be liquidated. To avoid this outcome, traders can add more margin to their trade to return leverage and reduce their position). This method is akin to keeping a position alive when the trade is heading further in the wrong direction. Adding more margin or reducing leverage is similar to starting with less leverage in the first place. The difference is that maintaining a specific margin ratio can be done over more extended periods and is a dynamic solution.<img src="https://public.bnbstatic.com/image/cms/blog/20220217/34515a68-7d02-4612-ad4e-7ab3835e1c0d.png"/><h2 style="line-height:1.38;margin-top:18pt;margin-bottom:6pt;">In Summary</h2>Liquidation is a scary word that traders would much prefer to avoid if possible. The good news is that traders have several tools and trading strategies that they can implement to avoid being liquidated. From stop losses to monitoring the margin ratio, traders have multiple resources to avoid liquidation. If you think you might want to learn more about trading, Binance Futures offers everything a trader may need to trade responsibly, like the <a href="https://academy.binance.com/en/articles/the-ultimate-guide-to-trading-on-binance-futures" target="_blank"><span style="font-size: 12pt; font-family: "IBM Plex Sans", sans-serif; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">Ultimate Guide to Trading on Binance Futures</a>. Additionally, the platform offers incredibly competitive rates, fees, and multiple financial instruments for traders. Read the following support items for more information about trading futures:<ul style="padding-inline-start: 48px;" class=" list-paddingleft-2"><li><a href="https://www.binance.com/en/support/faq/360040016512" target="_blank"><span style="font-size: 12pt; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">(Support) How to Place Stop Loss Order and Take Profit Order</a></li><li><a href="https://www.binance.com/en/blog/futures/how-binance-takes-responsible-trading-seriously-and-you-should-too-421499824684900595" target="_blank"><span style="font-size: 12pt; color: #1155CC; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">(Blog) How Binance Takes Responsible Trading Seriously, and You Should Too</a></li><li><a href="https://www.binance.com/en/support/faq/360033525271" target="_blank"><span style="font-size: 12pt; color: #1155CC; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;">(Support) Liquidation Protocol</a></li><li>And many more<a href="https://www.binance.com/en/support/faq/c-4?navId=18#/4/18" target="_blank"><span style="font-size: 12pt; color: #1155CC; background-color: transparent; font-variant-numeric: normal; font-variant-east-asian: normal; text-decoration-line: underline; text-decoration-skip-ink: none; vertical-align: baseline; white-space: pre-wrap;"> Binance Futures FAQ</a> topics...</li></ul> <a href="https://www.binance.com/en/futures" target="_blank"><img src="https://public.bnbstatic.com/image/cms/blog/20220217/bed23269-840f-42bf-a51f-0e60b500a45b.png"/></a>

2021-08-02

Fawazir Ramadan: Solve Riddles on X for Rewards!

<h2 data-block-id="113e9660-ac77-4ea0-8c4a-a761cff9efcf">Main Takeaways</h2><ul data-block-id="5c723ffd-3ee9-4a18-8e92-52d477af6547"><li data-block-id="11b73d9a-1f63-4ca7-92e7-fb673a8a753e">Follow <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://twitter.com/BinanceArabic" customevents="[object Object]">Binance on X (Twitter)</a> to take part in Fawazir Ramadan — a fun and rewarding Ramadan-inspired riddle competition running from March 11 to April 7, 2024.</li><li data-block-id="04797017-0813-4f68-b76b-28d70c72fce8">There are four riddles to tackle — one per week — with five winners per riddle each securing 100 FDUSD in rewards. Make sure your Binance account is verified to qualify. </li><li data-block-id="24c32896-336e-497b-895e-fe3e52c0531e">Fawazir Ramadan is part of our wider <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.%suffixOrigin%/%locale%/activity/calendar/ramadan-2024" customevents="[object Object]">2024 Ramadan Calendar</a>, packed full of activities, community events and charitable initiatives, and with more than $400,000 in rewards.</li></ul><figure data-block-id="88ea2f3e-39d9-41e7-a922-58b71bfb5ef4" data-type="imageFigure"><img contenteditable="false" src="https://public.bnbstatic.com/image/cms/blog/20240310/c7dd2552-39e5-481e-b860-b47357bcadb8" naturalwidth="1600" naturalheight="900" adaptive="true"><figcaption></figcaption></figure>Ramadan Mubarak from all of us here at Binance! In the world of crypto, where every interaction can unlock new possibilities, we’ve worked hard to carve out a place where community and innovation meet. As the moon heralds the start of the holy month, we’re excited to bring our users together through the joy of discovery and the spirit of giving. This Ramadan, we’re inviting you to join in the celebration and test your wits with our ‘Fawazir Ramadan’ riddle contest on <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://twitter.com/BinanceArabic" customevents="[object Object]">X (Twitter)</a> starting March 11. Each riddle comes with crypto rewards attached. But this is more than just a chance to win; it’s an opportunity to connect, learn, and celebrate the richness of this blessed month together. Read on to learn more!<h2 data-block-id="1641bfdf-4cfe-4445-9beb-29a9b91a55d2">Your Guide to Fawazir Ramadan: 500 FDUSD per Riddle</h2>This Ramadan, Binance is bringing a number of activities together for you to enjoy, blending charity, knowledge, challenges, and rewards into our <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.%suffixOrigin%/%locale%/activity/calendar/ramadan-2024" customevents="[object Object]">2024 Ramadan Calendar</a>. Among these gems is our much-anticipated Fawazir Riddle Contest, an engaging challenge waiting for you on our <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://twitter.com/BinanceArabic" customevents="[object Object]">official X (Twitter) </a>account. Here are the four things you need to know in order to take part:<ol data-block-id="222f9286-36c3-4fdb-99d3-fbb7da050f04"><li data-block-id="24c6d71e-0652-46b5-a54a-068bdab66398">Four Riddles to Solve: Each week, from March 11 to April 7, <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://twitter.com/BinanceArabic" customevents="[object Object]">our X account</a> will reveal a new riddle, designed to intrigue, challenge, and reward you.</li><li data-block-id="577f5fb4-d7b6-44c1-ab28-4a319fa558a0">Spot the Signal: Every contest riddle will carry the #RamadanWithBinance hashtag. It’s your beacon, signaling that a chance to win and celebrate is at hand.</li><li data-block-id="41f17a1e-6cbe-423c-a207-167caeece2c6">Join In: Every user gets one shot at glory per riddle. Make sure your Binance account is verified to qualify for rewards. You need to be smart, but you also need to be ready!</li><li data-block-id="b2adae83-622f-45e7-a16d-5f8fdc3512ab">Claim Your Prize: Quick wit pays off! Be the first to correctly solve the riddle, and you’ll earn yourself 100 FDUSD. Not the fastest? Don’t worry, four other victors, chosen at random from those who also answer correctly, will each be rewarded with 100 FDUSD. </li></ol>While the contest is part of our Ramadan activities, the riddles will span a variety of topics, ensuring everyone can join in on the fun. So, make sure you’re following our X account. Let’s make this Ramadan not just a time of reflection, but also of joy, community, and celebration!<h2 data-block-id="3ef6d892-a834-4a8b-9690-23f931b663f3">Ramadan with Binance: Share in $400,000 of Rewards</h2>We hope you enjoy the four riddles we’ll be sharing on X for Fawazir Ramadan. But as mentioned, this is only one part of our <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.%suffixOrigin%/%locale%/activity/calendar/ramadan-2024" customevents="[object Object]">2024 Ramadan Calendar</a>, which we’re hosting online.Starting from March 11, and running until March 20, each day unveils a new activity — from opportunities to engage with the community, learn through online educational events, and take part in charitable initiatives — all designed to inspire and bring us closer.Embark on an exciting journey through our calendar’s daily offerings and tap into a reward pool totaling $400,000. Each day, unlock new rewards, and participate in our Ramadan-themed activities. It’s a time to grow, give, and celebrate together.For a detailed guide on what to expect and how to make the most of this season, you can refer to our <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.binance.com/en/blog/markets/binances-2024-ramadan-calendar-a-journey-of-discovery-and-giving-4458577920864034961" customevents="[object Object]">blog on the 2024 Ramadan Calendar</a>. This is your chance to share in our crypto rewards.<h2 data-block-id="c4f152e2-196c-4d6c-887a-257f85dcd651">‘Always On’ Activities</h2>As well as the activities to be unlocked each day through March 11-20, our Ramadan Calendar features a number of ‘Always On’ activities, offering free and daily chances to win rewards. Some of the always-on activities running throughout the duration of our Ramadan Calendar include:<ol data-block-id="462440e6-df65-4513-89be-d9622a878bea"><li data-block-id="9b63f272-0ab5-450e-b104-e1f9ea99915d">Riddle Me This Ramadan: Solve Ramadan-themed riddles on Telegram, engage with fellow community members, and share a $15,000 reward pool in FDUSD!</li><li data-block-id="24019a9c-d996-4773-a9f3-cd79612cac35">Red Packet Giveaway: Claim your FREE Red Packet containing a crypto reward from 0.01 to 3 FDUSD. Earn an extra Red Packet for each friend you successfully invite to take part!</li></ol>Don't miss out on this unique opportunity to connect, learn, and earn rewards with Binance this Ramadan. Let’s make this month filled with blessings, joy, and generosity.<h2 data-block-id="5f9cfa70-de4d-4617-b960-d6c230abfb76">Further Reading</h2><ul data-block-id="b79931e1-cc95-4e8d-b612-1cf9e29c2887"><li data-block-id="def7bdf0-e7f7-4d3b-aaff-33e31aeb218f"><a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.binance.com/en/blog/markets/binances-2024-ramadan-calendar-a-journey-of-discovery-and-giving-4458577920864034961" customevents="[object Object]">Binance’s 2024 Ramadan Calendar: A Journey of Discovery and Giving</a></li><li data-block-id="65608c3a-c50d-49d6-99d0-d81ccea77838"><a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.%suffixOrigin%/%locale%/activity/calendar/ramadan-2024" customevents="[object Object]">The Binance Ramadan Calendar</a></li><li data-block-id="5a91b942-99b1-42d3-b5ae-e48ccb307b90"><a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.binance.com/en/blog/from-our-ceo/a-letter-from-our-ceo-my-first-100-days-leading-binance-6098215234509961325" customevents="[object Object]">A Letter From Our CEO: My First 100 Days Leading Binance</a></li></ul><hr data-block-id="043be4d4-3b3e-4096-91d3-61dd49e79ae6">Risk Disclaimer: Cryptocurrency prices are subject to high market risk and price volatility. You should only invest in products that you are familiar with and where you understand the associated risks. You should carefully consider your investment experience, financial situation, investment objectives and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. Past performance is not a reliable indicator of future performance. The value of your investment can go down as well as up, and you may not get back the amount you invested. You are solely responsible for your investment decisions. Binance is not responsible for any losses you may incur. For more information, please refer to our <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.binance.com/en/terms" customevents="[object Object]">Terms of Use</a> and <a target="_blank" rel="noopener noreferrer nofollow" appurl="" href="https://www.binance.com/en/risk-warning" customevents="[object Object]">Risk Warning</a>.

2024-03-10