By Alicia Maher
The CEO of the Binance crypto exchange, Changpeng Zhao, has recently announced the creation of a recovery fund. This comes in the aftermath of the FTX liquidity crisis and collapse that crashed the crypto market.
Collaborative Bailout
The exchange CEO announced on Monday that it focused on the crypto industry. It is going to help projects that have been running for a long time and were affected by the crisis. Crypto firms are asked to reach out to Binance Labs and check if they qualify for the bail-out fund.
In addition, CZ implored other buoyant crypto firms to join the recovery investment. This would help to hasten the market’s recovery. Crypto prices recently crashed lower and institutional investors are losing faith in the market.
The market keeps dragging lower following the FTX debacle. Importantly, the effect has spread and caught up with other firms that were yet to recover from the Terra collapse. Binance is equally one of them.
It is due to the market’s accelerated decline that CZ and Binance came up with the plan of a recovery fund. CZ announced the project via Twitter as he did the invitation to co-investors.
Frauds and Liars are Not Welcome
He said Binance is creating the industrial recovery fund in order to mitigate the spreading negative effects of the FTX crash. The fund will aid projects that would be strong if not for the crisis. CZ said more details about the fund will be announced soon.
But while waiting, the CEO asked those who might qualify to reach out to Binance Labs. One of those who have indicated an interest in being part of the initiative is Justine Sun, Tron’s founder. Sun believes that the fund will help good players get back on their feet.
Others who have indicated interest also include Simon Dixon, the largest investor at Celsius. The goal, for him, is to make the fund a decentralized entity. A Twitter user, Crypto King, inquired if FTX would qualify as a strong firm in a liquidity crisis.
CZ responded to him that frauds and liars do not qualify as such projects. It also goes for other projects within the ecosystem. Binance Pool launched a $500 million fund to lend to Bitcoin miners struggling in the crypto winter. A lot of miners suffered heavy financial losses after prices crashed by more than 75%.