The reason Bitget uses a combination of stablecoin and bitcoin in a protective fund is to counter huge unanticipated volatility in the cryptocurrency markets.
With the ultimate goal of restoring investor confidence amid the ongoing bear market, cryptocurrency derivatives exchange Bitget has launched a $200 million fund to protect user wealth. Bitget joins a growing list of crypto companies like Binance that are taking an investor-centric approach to building investor confidence with the help of protective funds.

The Bitget Protection Fund includes 6,000 Bitcoin (BTC) and 80 million Tether (USDT), valued at $200 million at the time of writing. With the crypto winter showing no signs of slowing down right now, Bitget has promised to secure the fund’s value over the next three years.

While Bitget chose to self-fund the entire protection fund without relying on a third-party insurance policy, Binance created its user protection insurance fund, the User Safe Asset Fund (SAFU), with a 10% trading fee. SAFU launched in 2018 and reached a $1 billion valuation in early 2022. Bitget Managing Director Gracie Chen shared details of the newly launched fund, adding:

“The Protection Fund will help us allay investor concerns and attract potential users. As we continue to live through the crypto winter, it is essential that our users can be sure that their funds are safe.”
The reason Bitget uses a combination of a stablecoin and BTC in a protective fund is to counteract the huge unanticipated volatility in the cryptocurrency markets. To further protect investors, Bitget has implemented strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies to prevent attackers from using its services.

Related: Voyager cannot guarantee that all customers will receive their cryptocurrencies in accordance with the proposed recovery plan.

Shortly after filing for bankruptcy, crypto-lending company Voyager Digital announced that it may not be able to reimburse all of its customers under its proposed recovery plan.

Following court approval, the proposed recovery plan for Voyager will include the return of approximately $1.3 billion of user funds in the form of a combination of Voyager tokens, cryptocurrencies, “reorganized entity’s common stock” and proceeds from all litigation with Three Arrows Capital (3AC).

“The plan is subject to change, negotiation with clients and ultimately agreement […] We have put in place a restructuring plan that protects clients’ assets and provides the best opportunity for value maximization,” the lending firm said.

Source: CoinTelegraph

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