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Binance creates $1 billion crypto industry fund after FTX collapse

by News Desk
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Binance co-founder and CEO Changpeng Zhao has given several interviews discussing the prospects of cryptocurrencies after weeks of market turmoil.

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Cryptocurrency exchange Binance announced Thursday new details about an industry recovery fund aimed at helping struggling players following the devastating bankruptcy of FTX.

and blog post, Binance said it will spend $1 billion in its initial commitment to the recovery fund. The company added that it could increase that amount to $2 billion at some point in the future “if the need arises.”

It has also received $50 million in commitments from crypto-native investment firms such as Jump Crypto, Polygon Ventures, and Animoca Brands.

Binance CEO Changpeng Zhao said: public wallet address Showing an initial commitment, he said, “We will do this transparently.” Public blockchain data reviewed by CNBC showed Binance’s own BUSD stablecoin balance to be around $1 billion.

According to the Paxos website, BUSD is a stablecoin issued by blockchain infrastructure company Paxos and is approved and regulated by the New York State Department of Financial Services.

The fund is Binance’s attempt to keep the crypto industry alive after controversial entrepreneur Sam Bankman-Fried’s exchange FTX filed for bankruptcy earlier this month.

Zhao has emerged as the new savior of an ailing industry, The Gap Left by Bankman-Friedthat company had bought or invested in a number of beleaguered crypto companies, from Voyager Digital to BlockFi, before it collapsed.

FTX’s failure was partly due to a tweet posted by Binance’s CEO, which drew attention to CoinDesk’s report raising questions about its accounting. FTX Rapid wind down Two weeks ago, investors worried about a cryptocurrency epidemic that could affect every corner of the industry.

At the first court hearing in the bankruptcy case on Tuesday, the company’s lawyers delivered a harsh verdict against FTX and its leadership, saying the company operates as Bankman-Fried’s “personal estate.”

Binance said the vehicle is “not an investment fund” and is intended to help companies and projects “that are facing significant short-term financial difficulties through no fault of their own.” Zhao has previously said he intends to prevent further “Cascading contagion effect” resulting from the collapse of FTX.

Binance says it expects the program to last around six months. We are accepting applications for additional funding from investors.

Binance said it is “flexible in its investment structure” and accepts token, cash and debt contributions. “We anticipate that individualized solutions will be required,” the company added.

About 150 companies have already applied for support from the fund, according to Binance.

The cryptocurrency market did not react greatly to this news. in the past hour, Bitcoin Despite gaining about 0.2%, Ether traded flat in the session.

Thin trading volumes are expected in the US as Americans celebrate the Thanksgiving holiday.

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