Binance to Launch Crypto Recovery Fund

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Binance wants to keep crypto projects afloat amidst ongoing turmoil.

Last week, Sam Bankman-Fried, owner of major crypto exchange FTX, announced that he and his company were filing for bankruptcy amidst an ongoing investigation of misappropriation of user funds. As a direct result of this announcement and the subsequent withdrawal and sell-off, the crypto market is currently experiencing one of its most severe crashes so far, with even the bedrock currencies like Bitcoin being affected.

On the heels of the crash, one of FTX’s biggest competitors, Binance, announced that they would begin assembling an “industry recovery fund” to ensure the safe continuation of cryptocurrency business operations.

“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis,” Binance CEO Changpeng Zhao wrote on his Twitter. “More details to come soon. In the meantime, please contact Binance Labs if you think you qualify.”

Earlier in the month, Binance liquidated its stock of FTX’s native cryptocurrency, FTT, as the company was already experiencing the beginnings of turmoil. The company was considering using this money to fund a rescue operation for FTX itself, but it has since cancelled those plans.

In light of Bankman-Fried’s actions, Zhao has called for new regulations to be placed on the crypto industry to ensure funds could not be coopted in the same way FTX did again. “We’re in a new industry, we’ve seen in the past week, things go crazy in the industry,” Zhao told a gathering of G20 leaders at a summit in Bali. “We do need some regulations, we do need to do this properly, we do need to do this in a stable way.”

“I think the industry collectively has a role to protect consumers, to protect everybody. So it’s not just regulators. Regulators have a role but it’s not 100% their responsibility,” Zhao said.

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11 months ago
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