Image courtesy of Binance Twitter page
- Binance announced that it had topped the crypto recovery fund to $2 billion from $1 billion.
- The leading crypto exchange is also trying to acquire some of FTX’s assets when they become available.
The collapse of FTX signals another busy period for the CEO of the world’s largest crypto exchange, Binance. He has established a crypto recovery fund to help troubled crypto firms with solid fundamentals.
Today, Changpeng Zhao gave an update regarding the newly launched recovery fund. He announced that Binance had doubled its initial rescue fund to $2 billion from $1 billion.
Contributing to the Recovery Fund
In an interview on Thursday, Zhao disclosed that the crypto rescue fund consists of funds from co-investors who will support projects on the brink of a liquidity crisis. According to the Binance chief, the approach allows several wealthy individuals to contribute based on their capacities to the growth and sustainability of the industry. He further said that’s what he is expecting.
Notably, many industry big guns, like Polygon, Animoca Brands, Jump Crypto, Aptos Labs, Brooker Group, GSR, and Kronos, have already pledged a combined amount of $50 million. Meanwhile, the Binance boss explained that the aim is to limit the damage that the crumbling of FTX has caused to the industry. However, Binance has not stated how much it will contribute to the recovery fund.
Read More: Heavyweights Jump Crypto, Aptos, and Polygon support industry recovery fund – Crypto will be safe
However, sources familiar with the development noted that the exchange’s prospective involvement is greater than the monetary commitment announced by other players. Meanwhile, the Binance recovery fund is reported to contain a crypto token linked to the exchange. On-chain data shows two of the addresses associated with the fund have BNB coins, which account for 44 percent of its total reserves.
David Adams, a portfolio manager at King River Digital Assets Fund, commented on the development. He told Bloomberg;
the crypto space will be observing to see how the fund’s wallet will attract contributions from non-Binance capital. This will show the true intent of industry players in supporting the stabilization process for the industry.
Like every well-intentioned move, the recovery fund is under scrutiny. The Binance CEO’s tweet about his exchange’s sale of their FTT tokens triggered mass withdrawals and eventually collapsed the exchange. As a result, some UK lawmakers want the exchange to explain the conditions around Zhao’s Twitter post on November 6.
Binance considers FTX’s asset purchase
Meanwhile, Zhao also announced the intention of his exchange to buy over some of FTX’s assets following its collapse, but he did not specify which among them.
He continues by saying that some of the collapsed exchange’s assets are still in perfect shape.
Overall, there are several assets that Binance considers okay, and the exchange will look through them once they are available,
After Sam Bankman-Fried firms, FTX, and fund manager Alameda Research went into bankruptcy, there have been several cases of the impact of the contagion on the failed companies. In addition, some digital asset service providers, like Genesis and Gemini, have filed or are facing bankruptcy after their exposure to the Bankman-Fried-led companies.
The crypto lender, BlockFi, is considering filing bankruptcy for the same reason. In addition, reports claim that the firm has discussed with Binance for possible assistance.
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