Funds Are SAFU | CZ explains asset management to users, emphasizing that all assets are held in segregated accounts.

The CEO of Binance, Zhao Changpeng (CZ), recently sent an email to Binance users, assuring them that user assets on Binance are held in segregated accounts and undergo daily asset checks.

According to a report from Yahoo Finance, this email is addressed to the Binance community, known as "Binancians." For Binance, which originated from its community, ensuring that the community understands Binance's asset management methods and increasing community confidence is crucial.

CZ: Binance conducts daily checks on the encrypted assets held by users. We only use our own funds for trading, and company funds are not commingled with user funds.
Management of Binance wallets

According to Binance's official statement, centralized exchanges have "deposit wallets," as well as cold wallets and hot wallets.

Each user will have one or more addresses on the blockchain (depending on the types of assets). When users deposit assets, they are actually first deposited into Binance's deposit wallet. After Binance's monitoring system confirms this, the corresponding assets will be transferred to the exchange's hot wallets and cold wallets.

Binance regularly transfers the assets in these deposit accounts to the exchange's (Binance.com) hot wallets and cold wallets, and the timing depends on the network's GAS fees. Sometimes, if the GAS fees are too high, Binance will wait until they decrease before transferring the assets.

Of course, there are exceptions for large deposits, and sometimes the platform may directly transfer large deposits to cold wallets.

CZ: Generally, large deposits will be transferred more quickly, while small deposits may wait until the total amount accumulates enough for a single transfer, or until the GAS fees decrease before transferring.

One of the key factors that allows Binance to remain competitive is minimizing GAS costs, and the saved costs can be passed back to users.

CZ stated that the logic behind transferring assets for exchanges is to minimize the number of transfers and GAS costs.

When users want to withdraw assets, they will first withdraw from the hot wallet. When the quantity in the hot wallet drops to a certain level, assets will be transferred from the cold wallet to the hot wallet. In other words, most assets are stored in cold wallets, which can isolate hacker intrusions.

Since its establishment in 2017, Binance has been profitable just four months after its inception and has remained profitable to this day.

CZ guarantees that because Binance operates as a self-sufficient ecosystem, it can avoid the risk of liquidity contagion affecting Binance users, similar to what happened with the collapse of FTX.