Binance transferred roughly $100 million worth of bitcoin BTC$77,528.46 from a hot wallets into its Secure Asset Fund for Users (SAFU), marking an early on-chain step in the largest crypto exchange's plan to reframe its user protection reserve around the largest cryptocurrency.

Blockchain data identified by Arkham shows about 1,315 BTC moved in a single transaction from a Binance-labeled wallet to a known SAFU fund address early Monday. The transfer was direct and showed no signs of interaction with external wallets, suggesting an internal treasury reclassification rather than a market-facing trade.

Binance later confirmed on X that the movements were part of its proposal SAFU fund, following CoinDesk's coverage.

"Binance has completed the first batch of Bitcoin conversion for the SAFU Fund, amounting to 100M USD stablecoins," the exchange said. "We’re continuing to acquire Bitcoin for the SAFU fund, aiming to complete conversion of the fund within 30 days of our original announcement."

SAFU is a security fund created to protect users from losses due to unforeseen events such as hacks. Last week, Binance said it would convert $1 billion worth of dollar-pegged tokens into bitcoin for the fund over the next 30 days, and pledged to replenish the amount if the value fell below $800 million due to price swings.

That announcement sparked speculation the exchange would become a large spot buyer of bitcoin.

Monday’s on-chain activity suggests otherwise, at least for now. The transaction does not represent a conversion of stablecoins into bitcoin. Instead, Binance appears to be allocating bitcoin it already held into the fund, effectively ring-fencing part of its existing reserves as designated user protection capital.

The shift does, however, introduce a different risk profile. A bitcoin-backed SAFU fund will fluctuate in value alongside the broader market, increasing the importance of Binance’s promise to top it back up during periods of volatility.

UPDATE (Feb. 2, 10:04 UTC): Adds Arkham in second paragraph, reason for SAFU fund in third.

UPDATE (Feb. 2, 10:28 UTC): Adds Binance's confirmation tweet about the movements belonging to the SAFU fund.