Changpeng Zhao, the CEO of Binance, has warned the crypto community about the repercussions the collapse of FTX could have on the industry. It’s a bad step to take, he agrees, but it’s time to rebuild. In its rebuilding plan, Binance has created a recovery fund for the strongest projects.
Binance launches recovery fund to support the crypto industry
Within just a few days, FTX, once the third-largest crypto exchange by trading volume, collapsed. Billionaire Sam Bankman-Fried, CEO and figurehead of the platform has resigned. His company was then declared bankrupt on Friday 11 November. The situation obviously raises the possibility of a chain reaction that could affect the crypto industry and financial markets more broadly. The hour is serious, but CZ remains optimistic.
For the CEO of Binance, the urgency is to limit the negative impacts of this sudden and spectacular collapse of FTX. In a Tweet today, he announces a recovery fund to help reliable projects in need of liquidity. “Binance creates an industry recovery fund, to help projects that are otherwise strong, but in liquidity crisis”. He adds that other industry players with cash who wish to co-invest in this stimulus project are welcome.
Crypto won’t go away, reassures CZ
The financial impact of the collapse extends far beyond FTX’s immediate customer base and partners. The week’s events sent other crypto coins into a downward spiral, with the price of bitcoin and ether dropping more than 10%. Experts also fear that FTX’s bankruptcy could cause other companies, like crypto lender BlockFi, to take a dive. Faced with this risk, the latter took the lead. Last Thursday, exchange BlockFi announced that it was forced to freeze withdrawals.
The FTX implosion probably remains one of the most catastrophic events in crypto in recent years. Nevertheless, CZ remains confident in the future. Binance CEO reassured the crypto community. In his Tweet announcing the recovery fund, he takes the opportunity to allay fears. “Crypto is not going away. We are always here. Rebuild »he says.
Going back to the stimulus fund announced by CZ, crypto projects wishing to benefit from liquidity are advised to verify their eligibility with Binance Labs. The latter is part of one of the companies of capital risk the most active in the cryptosphere.
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