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The Bitget protection fund comprises 6000BTCs and 80 million USDTs.
Global derivatives exchange Bitget has launched a $200 million Bitget Protection Fund to promote investor trust and protect user assets. Binance launched a similar fund in 2018. The fund proved helpful when the exchange lost $40 million to hackers in 2019.
Bitget’s protection fund comes at a time investor confidence and trust are at an all-time low. In the last few months, many exchanges and trading platforms have had to halt or restrict withdrawals even as investors sought to pull out their funds. While the situation has improved in the past week, global macroeconomic conditions mean the crypto ecosystem may not be out of the woods yet.
Asides from market volatility, investors have also had to face a spate of hacks and thefts. In Q1 2022, Immunefi reported that the crypto market lost about $1.22 billion to crypto hacks and thefts. The crypto community lost another $670 million in the second quarter.
Both volatility and security concerns have wiped out investor confidence, and a protection fund like Bitget’s may be just what’s necessary to restore confidence.
About the Bitget Protection Fund
The Bitget protection fund comprises 6000BTCs and 80 million USDTs. While the bitcoin may be subject to volatility, the stablecoins introduce some measure of stability to the fund. The funds will be secured by the firm till 2025 and serve as a safeguard for Bitget users. As a self-sourced and administered fund, the protection fund will not be affected by external bureaucracy and policy change.
Bitget’s managing director, Gracy Chen, noted that there was a need t reassure its users, hence the need for the protection fund. “With the launch of the Bitget Protection Fund, we are one step closer to fulfilling our commitment to safeguarding and protecting our Bitget community.”
Chen believes the fund can mitigate investors’ concerns and attract new users. Likewise, Chen hopes that other centralized exchanges will follow suit and address accountability issues.
Meanwhile, Bitget has also rolled out plans to help fish out illegal operators on its platform. The derivatives trading firm uses a strict KYC and AML policy to vet its community members and prevent illicit transactions on its platform.
Established in 2018, Bitget boasts over 2 million users and recorded about $100 billion in transactions in 2021.