Crypto

Binance is making progress in building its Recovery Fund

Binance, the world’s largest cryptocurrency exchange, is looking for partners to create a rescue fund for platforms facing one of the industry’s worst crises.

The fund already has a billion dollars

The FTX incident continues to wreak havoc on the crypto ecosystem, with some funds and companies struggling. In this sense, Binance wants to create a fund to support the crypto industry.

The goal is to be able to help the most vulnerable companies in the most difficult circumstances, as Changpeng Zhao mentioned in a series of tweets. It is clear that the project is in the process of implementation. Binance has confirmed that it has raised about $1 billion to set up a cryptocurrency backing fund.

The creation of this emergency fund is not surprising. However, the crypto platform provided some details. So, for example, industry players will have the opportunity to participate in the fund. Encrypted addresses where funds are deposited will also be public. Finally, a Binance spokesperson clarified that a blog post will be posted shortly to continue communication regarding the implementation of this action.

A Binance official closely followed the development of the FTX situation and expressed his concerns about the cryptocurrency space on Twitter. In fact, it was Changpeng Zhao’s decision to sell all FTX (FTT) tokens that led to the discovery of a deeper vulnerability in FTX.

When FTX went out of business, Changpeng Zhao helped make Binance the largest cryptocurrency exchange in the world. The goal of the recovery fund will be to stop any contagion from similar FTX incidents in the future, he said.

In a recent interview, Zhao said he had spoken to many people in the industry. Binance will soon publish a detailed blog post explaining how the Recovery Fund works. “We will take a flexible approach and different industry players will contribute as they wish,” he said.

Binance Strategic Financing

The first call of the fund took place on 14 November. At the beginning of the storm caused by the bankruptcy of the FTX platform, Binance announced in the voice of its CEO that it wants to create an “industry recovery fund to help projects that are reliable but are facing a liquidity crisis.”

CZ also reaffirmed its support for the industry as a whole by inviting participants who believe they qualify to contact Binance Labs, the platform’s finance arm. He also said that he welcomes other crypto companies that have money to jointly invest in the fund along with Binance, emphasizing that “cryptocurrency will not disappear.”

On Thursday, CZ also said it wants to acquire Voyager Digital, a similar failed cryptocurrency lender that was previously acquired by FTX. Binance is also in talks with Genesis Global, which is seeking emergency funding for its lending arm.

Zhao Changpeng believes that if Genesis collapses, difficulties will arise and some large institutions will suffer. However, the CEO of Binance believes that the industry will still survive. “It hurts every time an actor falls,” he said.

However, in an interview with Bloomberg, he declined to answer questions about the future location of Binance’s headquarters, saying only that Dubai and Paris are now its “global hubs.” Since its establishment in the United Arab Emirates last year, CZ has been gradually expanding its business in Europe and the Middle East.

Although his $80 billion personal fortune has dwindled due to the cryptocurrency crash in 2022, he still remains the richest crypto billionaire in the world with $15 billion.

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