Binance co-founder and CEO Changpeng Zhao has given several interviews discussing the outlook for cryptocurrencies after a turbulent two weeks in the market.
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Cryptocurrency exchange Binance on Thursday announced new details about its industry recovery fund, which aims to support players struggling in the wake of the devastating FTX bankruptcy.
In a blogpost, Binance said it would commit $1 billion in initial commitments to the recovery fund. It may increase that amount to $2 billion at some point in the future “if the need arises,” the company added.
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It has also received $50 million in commitments from crypto-native investment firms including Jump Crypto, Polygon Ventures and Animoca Brands.
Binance CEO Changpeng Zhao shared the address of the public wallet showing his initial commitment and said, “We are doing this transparently.” Public blockchain data reviewed by CNBC showed a balance of around $1 billion in Binance’s BUSD stablecoin.
BUSD is a stablecoin issued by blockchain infrastructure company Paxos and is approved and regulated by the New York State Department of Financial Services, according to Paxos’ website.
The fund is an attempt by Binance to keep the cryptocurrency industry alive after controversial entrepreneur Sam Bankman-Fried’s FTX filed for bankruptcy earlier this month.
Zhao has emerged as a new savior for the troubled industry, filling a void left by Bankman-Fried, whose firm had bought or invested in a number of beleaguered crypto companies — from Voyager Digital to BlockFi — before its collapse.
FTX’s failure was partly triggered by a tweet posted by Binance’s CEO, which drew attention to a CoinDesk report that raised questions about its accounting. Since the rapid collapse of FTX two weeks ago, investors have been concerned about a potential cryptocurrency contagion affecting every corner of the industry.
At the first hearing in the bankruptcy case on Tuesday, an attorney for the company delivered a damning verdict of FTX and its leadership, saying the company was being run as Bankman-Fried’s “personal fiefdom.”
Binance said the vehicle is “not an investment fund” and is intended to support companies and projects that “through no fault of their own, face significant, short-term, financial difficulties.” Zhao has previously stated that it is his intention to prevent further “cascading contagion effects” from the FTX collapse.
Binance said it expects the program to last about six months. It accepts applications from investors to contribute additional funds.
Binance said it is “flexible in its investment structure” and accepts contributions in tokens, cash and debt. “We expect that individual situations require customized solutions,” the company added.
About 150 companies have already applied for support from the fund, Binance said.
Crypto markets did not react significantly to the news. In the past hour, bitcoin rose about 0.2%, while ether traded flat for the session.
Light trading volumes are expected in the US as Americans celebrate Thanksgiving.