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Binance is making nearly $1 billion in keeping the crypto industry afloat following the FTX collapse

Keeping the crypto industry afloat, Binance makes nearly $1 billion

November 28, 2022: On Tuesday, Cryptocurrency exchange Binance announced further details about its industry recovery fund, aiming to prop up struggling players of FTX’s calamitous bankruptcy.

In a post, Binance said it would devote $1 billion in starting commitments to the recovery fund. It may surge to $2 billion at a point in the future “if the need grows,” the company further said.

It has got $50 million in commitments from crypto-native investment firms, which include Jump Crypto, Polygon Ventures, and Animoca Brands.

Binance CEO Changpeng Zhao shares the public wallet address showing its initial commitment.

“We do this transparently.” Public blockchain data showed a nearly $1 billion balance in Binance’s BUSD stablecoin.

BUSD is issued by blockchain infrastructure company Paxos and is approved and regulated by the New York Department of Financial Services, Paxos’ website stated.

The fund is by Binance to keep the crypto industry afloat following controversial businesses Sam Bankman-Fried’s exchange FTX filed for bankruptcy.

Zhao engaged as a new saviour-like figure for the ailing industry, which fills a gap left by Bankman-Fried; the firm had bought or invested in several beleaguered crypto firms, from Voyager Digital to BlockFi, before its collapse.

FTX’s failure was partially triggered by a tweet stated by Binance’s CEO, gaining attention to a CoinDesk report and increasing questions over its accounting. After FTX’s rapid winddown for two weeks, investors have fretted over a crypto contagion affecting every industry corner.

On Tuesday, the first court to hear for the bankruptcy case, a lawyer for the company gave a damning of FTX and its leadership, saying the firm was run as the “personal fiefdom” of Bankman-Fried.

Binance stated that the vehicle “is not an investment fund” and intends to support companies that “through having no mistake of their own, are encountering significant, short-term, financial difficulties.” Zhao has said he wants to prevent further “cascading contagion effects” stemming from FTX’s collapse.

Binance stated that it anticipates the program will include previous around six months. It accepts applications from investors to contribute additional funds.

Binance added that it is “flexible on the investment structure” and accepts tokens, cash and debt contributions. “We expect individual situations which require tailored solutions,” the company added.

Around 150 companies have applied for help from the fund, Binance said.

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