February 9, 2023

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Cryptocurrency exchange Binance on Thursday announced new details about its Industry Recovery Fund, which aims to shore up struggling players in the wake of FTX’s catastrophic bankruptcy.

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one in blog post, Binance said it would invest $1 billion in initial commitments to the recovery fund. The company said that amount could be increased to $2 billion in the future “if the need arises”.

It has also received $50 million in commitments from crypto-native investment firms including Jump Crypto, Polygon Ventures and Animoca Brands.

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Binance CEO Changpeng Zhao shared public wallet address Showcasing its early commitment, it said: “We do this transparently.” Public blockchain data reviewed by CNBC showed nearly $1 billion in balances in Binance’s own BUSD stablecoin.

According to Paxos’ website, BUSD is a stablecoin issued by blockchain infrastructure firm Paxos and is approved and regulated by the New York State Department of Financial Services.

The fund is an attempt by Binance to keep the crypto industry afloat after controversial entrepreneur Sam Bankman-Fried’s exchange FTX filed for bankruptcy earlier this month.

Zhao has emerged as a new savior for the ailing industry, filling the gap left by Bankman-Fried, whose firm had bought or invested in several troubled crypto firms – from Voyager Digital to BlockFi – since its collapse. Earlier

The FTX fiasco was triggered by a tweet posted by the CEO of Binance, which drew attention to a CoinDesk report that raised questions about its accounting. Since the rapid shutdown of FTX two weeks ago, investors have fretted over a potential crypto contagion affecting every corner of the industry.

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At the first hearing of the bankruptcy case on Tuesday, a lawyer for the company delivered a harsh judgment of FTX and its leadership, saying the company was run as a “personal fiefdom” of Bankman-Fried.

Binance said the vehicle is “not an investment fund” and aims to support companies and projects that “are experiencing significant, short-term, financial difficulties through no fault of their own.” Zhao has previously stated that this is intended to prevent a “cascading contagion effect” stemming from the collapse of FTX.

Binance said it expects the program to run for about six months. It is accepting applications from investors for contribution of additional funds.

Binance said it is “flexible on investment structure” and is accepting contributions in tokens, cash and debt. “We expect that different situations will require tailored solutions,” the company said.

Binance said that around 150 companies have already applied for support from the fund.

Crypto markets did not react significantly to this news. in the last hour, Bitcoin was up about 0.2%, while ether was trading flat for the session.

Thin trading volume is expected in the US as Americans celebrate the Thanksgiving holiday.