With the ultimate goal of restoring investor confidence amid a prolonged bear market, crypto derivatives exchange Bitget has launched a $200 million fund to protect user assets. Bitget joins the growing list of crypto companies, such as Binance, that have taken an investor-centric approach to winning the trust of investors through sandboxes.
The Bitget hedge fund consists of 6,000 Bitcoin (BTC) and 80 million Tether (USDT), valued at $200 million at the time of writing. Given the fact that the crypto winter is currently showing almost no signs of slowing down, Bitget has pledged to secure the value of the fund for the next three years.
While Bitget has opted to self-fund the entire sandbox without relying on a third-party insurance policy, Binance has created its own user protection insurance fund, the Safe Asset for Users (SAFU), by allocating 10% of trading fees. Starting in 2018, SAFU reached a valuation of $1 billion by early 2022. Gracie Chen, managing director of Bitget, added, sharing details about the newly created fund:
The sandbox will help us alleviate investor fears and attract potential users. As we continue to endure the crypto winter, it is critical that our users are assured that their money remains safe.”
Bitget’s reason for using a combination of stablecoins and BTC in a hedge fund is in the face of unexpectedly huge 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 bad actors from using its services.
Related: Voyager does not guarantee that all customers will receive their cryptocurrency under the proposed redemption plan
Shortly after filing for bankruptcy, crypto lender Voyager Digital revealed that it may not be able to compensate all of its customers under the proposed recovery scheme.
Subject to court approval, Voyager’s proposed recovery plan includes reimbursing users of approximately $1.3 billion in a combination of Voyager tokens, cryptocurrencies, “shares common in the newly restructured company” and funds from any actions with Three Arrows Capital (3AC).
“The plan is subject to change, negotiation with clients, and ultimately voting […] We put in place a restructuring plan that will preserve client assets and provide the best opportunity for maximum value.” The lending company said.
