Binance’s founder and CEO said the company’s crypto recovery fund will be $1 billion initially. The largest crypto exchange in the world, Binance, has set up this crypto recovery fund to help projects that have fallen into a liquidity crisis in the wake of the collapse of FTX.
$1 billion recovery fund
In an interview with Bloomberg, Changpeng Zhao said the fund would have a “loose” structure and be publicly visible on the blockchain. Other players in the sector could also contribute to this.
He promised that more details would be published in a Binance blog post. He also promised that the fund would start soon.
The industry needs to be saved now, not in 2023.
—Changpeng Zhao
The team will then assess whether more than $1 billion is needed before injecting more cash.
We’re thinking roughly of investing $1 billion first, and if that’s not enough, we’ll allocate more. After six months, if there are unused funds and there are not that many projects, we can withdraw it. Hopefully the industry will have recovered by then.
— Chanpeng Zhao
Changpeng Zhao first announced the launch of a “recovery fund” to support businesses on November 14. The fund is intended for companies that are normally strong but are now in a liquidity crisis due to the bankruptcy of FTX. BankToTheFuture CEO Simon Dixon and Tron founder Justin Sun also announced contributions to the fund. However, it is unclear whether they actually contributed.
Binance targets troubled assets from FTX
Zhao confirmed that some of the troubled crypto projects bought by the now-bankrupt exchange FTX may be on the fund’s shopping list. However, he didn’t say which one.
We definitely want to look at those assets. They’ve invested in a number of different projects, some are OK, some are bad, but I think there are some salvageable assets. We’ll check them out when they’re available.
—Changpeng Zhao
Sam Bankman-Fried’s companies, including both FTX and Alameda Research, experienced a takeover and bailout earlier this year in the wake of Terra’s collapse and subsequent pain for the crypto industry.
Crypto lender BlockFi accepted credit from FTX.US in the summer and is now considering launching its own bankruptcy proceedings. It has already held talks with Binance about possible help.
Meanwhile, Voyager Digital, which in September accepted a $1.4 billion bid from FTX to acquire its troubled assets, is now looking for another buyer.
In September, SBF alleged that FTX had $1 billion to spend on more buyouts. At one point, rumors even circulated that he was considering an acquisition of publicly traded trading app Robinhood.
With SBF falling out of favor, CZ must now step into the role of savior of the industry, although Binance’s CEO previously indirectly criticized FTX’s tactics in a June blog post.
Don’t perpetuate bad businesses. Let them fail.
—Changpeng Zhao