Binance to launch “industry recovery fund” to minimize strain from FTX collapse

Sahana Kiran
Source – Unsplash

Just as the crypto community was recovering from the dramatic downfall of Terra, it was hit with yet another failed project. Throughout last week, the industry witnessed the collapse of the FTX empire. On one hand, the FTX token [FTT] kept plummeting all the way from a high of $25 to a low of $1.29. On the other hand, FTX filed for bankruptcy, and its CEO Sam Bankman Fried stepped down. Amidst all of this, Binance did not sit as a mere spectator.

Binance’s CEO Changpeng Zhao took to Twitter and revealed that the exchange was setting up a recovery fund for the entire industry. This fund will specifically focus on aiding projects during a liquidity crisis.

The downfall of the FTX empire has closed several doors. However, Binance was seen bringing a positive notion into the industry amidst this time. CZ tweeted,

“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify.”

CZ further urged other industry players who were interested in co-investing were also welcome. He also pointed out that crypto wasn’t going anywhere. However, all it needed was rebuilding. He tweeted,

FTX not included in Binance’s latest initiative?

As seen in CZ’s above tweet, he mentions how Binance would provide aid for “strong” projects that encounter liquidity crises. This did not settle well with the community, who questioned how FTX would qualify as strong. CZ, however, clarified that “Liars or fraud never qualify as strong projects. This is for other projects in the ecosystem.”

In addition to this, Justin Sun affirmed that Tron, Huobi as well as Poloniex was ‘echoing‘ CZ’s latest initiative to help the industry recover.

Vlad Gorbunov, Founder and CEO of the earn marketplace addressed CZ’s latest move and told Watcher.Guru via an exclusive textual commentary,

“The impacts of the recovery fund will not be felt in the short term but can help in the general recovery of the industry in the long term. With other key players like Tron’s Justin Sun already pledging support for the initiative, the industry may rally around to save other bigger projects on the brink of collapse in the long term. This will have an untold effect in retaining trust in the industry, and fuel the highly carved growth of crypto assets.”