Binance Locks USDC Reserves for Seller Protection

Full Purchase Funds Required for Seller Protection

Binance's new seller FAQ requires full purchase funds for put sellers, and early assignment can happen overnight. This move is designed to protect sellers from potential losses in case the buyer decides not to exercise the option. However, it conflicts with the platform's linked terms, which describe long-only trading.

Locking USDC Reserves for Seller Protection

The platform has also locked its USDC reserves to support the seller's obligations. This means that the funds will be held in reserve until the order is filled or canceled, and they cannot be used for other orders or withdrawals.

Premium Payments and Share Settlement

Premium payments and share settlement after assignment follow T+1 settlement. This means that the premium is credited separately and does not reduce the full reserve. The seller cannot control the buyer's decision to exercise the option, and the written position is not automatically closed at expiry.

Conflict with Linked Terms

The new FAQ describes a premium in exchange for a funded share-purchase or delivery obligation, but the public terms remain inconsistent with that description. This raises concerns about the security of USDC and the clarity of Binance's policies.

Precedent & Market Context

The announcement comes as the industry is racing against time to migrate to post-quantum security measures before 2029. Google's breakthrough in quantum computing has raised concerns about the security of Bitcoin, and the company's method, called 'magic state cultivation', could potentially threaten Bitcoin's cryptography.

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