Binance to infuse $1 billion to revive crypto industry after FTX collapse
- Binance will pump $1 billion into a crypto recovery fund after the recent FTX collapse.
- The crypto exchange has said that the amount could change to $2 billion in the future if required.
- Investors have been concerned about a crypto contagion spreading to the entire business since FTX’s dramatic collapse.
Binance has provided some fresh information related to the industry recovery fund created by the cryptocurrency exchange Binance. The fund is largely created to support struggling players in the crypto market in the wake of FTX’s disastrous collapse.
Binance stated in a blog post it will make an initial payment of $1 billion to the recovery fund. The business noted that if the need comes, it may eventually boost that total to $2 billion.
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More about Binance’s recovery fund
Binance has received an additional $50 million toward the fund from crypto-investment firms including Polygon Ventures, Animoca Brands, and Jump Crypto. Chanpeng Zhao, CEO of Binance shared the public wallet address to show that they have created a recovery fund and will remain transparent about it.
Binance stated it expects the initiative to continue for about six months. Investor applications are being accepted for additional contributions.
According to Binance, it is “flexible on the investment structure” and accepts contributions as debt, cash, and tokens. We expect unique circumstances will pave the way for unique and bespoke solutions, the business said.
The company has said that around 150 companies have already requested help from the fund.
CNBC reviewed the public blockchain data, which shows a balance of nearly $1 billion in Binance’s BUSD stablecoin. According to blockchain infrastructure provider Paxos’s website, BUSD is a stablecoin that has been certified and governed by the New York State Department of Financial Services.
Binance created the fund to support the cryptocurrency market after FTX, the controversial exchange founded by businessman Sam Bankman-Fried, declared bankruptcy earlier this month.
FTX collapse raises concerns among crypto players
Zhao has come out as a new saviour-like figure for the struggling industry, filling the void left by Bankman-Fried, whose company had purchased or invested in several troubled crypto businesses — from Voyager Digital to BlockFi — before its collapse.
A tweet from Zhao that called attention to a CoinDesk article casting doubt on its bookkeeping precipitated part of FTX’s downfall. Investors have been concerned about a potential crypto pandemic infecting every aspect of the sector since FTX’s abrupt wind down two weeks ago.
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