Bitget Increases Protection Fund to $300m after FTX Collapse
On November 15, a popular global cryptocurrency platform, Bitget announced that it will increase the amount of the current Protection Fund to $300 million, to provide better protection and further assurance to crypto users, after the recent FTX crash.
The Protection Fund was first presented in July of this year with a fund worth $200 million (6000 BTC and 80M USDT). It is self-funded to cover the wealth of every user efficiently and better safeguard clients’ assets. An additional $100 million will come from investments in highly liquid cryptocurrencies, like USDT, BTC, and USDC.
The exchange has vowed to safeguard the value of the fund for the next 3 years without withdrawals. On the off chance that the value starts to decline, such as, in case of excessive bitcoin decline, the exchange expects to invest additional funds. Thus, the value of the Protection Fund is supposed to stay at $300 million consistently.
"Expansion for Bitget Protection Fund is another move by Bitget to help enhance trust and confidence in the crypto space as a whole. Working as an emergency reserve and with additional capital, the fund would be able to offer top-notch safety and protection for users, especially in extreme and unpredictable situations in the crypto space. We believe that risk management policies such as protection funds would become the norm for prominent and reliable exchanges," Gracy Chen, the Managing Director of Bitget, said.
As indicated by Tuesday’s official statement, Bitget declared two additional initiatives to shield its clients better. In a transition to help FTX traders, the crypto exchange has begun a five million USD Builders' Fund. Bitget plans to deliver its own Merkle Tree Proof-of-Reserves within 30 days.
Merkle Trees permit clients to effectively and straightforwardly guarantee individual transactions. Following the FTX collapse, cryptocurrency exchanges started offering like an answer and promising to Proof-of-Reserves to reassure users and revamp their trust.
CBW - External Analyst