Crypto Frontline

United States – Cryptocurrency trading platform Binance to devote $1 billion as a recovery fund to stabilize the crypto industry after the FTX crisis. 

Binance, a crypto exchange platform, announced on Thursday, November 24, the new details regarding the recovery fund of the industry. These funds target prop up striving players in the wake of the catastrophic bankruptcy of FTX. 

Binance stated in a blog post that it would allot $1 billion in primary commitments to the recovery fund of the cryptocurrency industry. It might boost the devoted amount from $1 billion to $2 billion in the future if it’s necessary, as per the company.

The company also obtained $50 million in commitments from digital asset-native investment companies, like Animoca Brands, Jump Crypto, and Polygon Ventures. 

Changpeng Zhao, the CEO of Binance, stated the public digital wallet address displaying the initial commitment. He stated that they do it transparently. Public blockchain information, which CNBC reviewed. It revealed a balance of about $1 billion in the BUSD stablecoin of Binance. 

BUSD is a stablecoin issued, which Paxos issued. Paxos is a blockchain infrastructure that the New York State Department of Financial Services regulated and approved. 

Binance established the recovery fund to maintain the cryptocurrency industry afloat despite the controversy of Sam Bankman-Fried, the founder of FTX, who filed for insolvency earlier in November. 

Zhao developed as a new savior-like shape for the unwell industry, filling a gap that Bankman-Fried left. Before the collapse, his company bought several troubled digital asset firms, like BlockFi and Voyager Digital. 

The CEO of Binance triggered the failure of FTX after its tweet. It attracted attention to a report by CoinDesk, which raised accounting questions. Since the quick winddown of FTX in the last two weeks, shareholders fretted over a probable digital asset contagion impacting corners of the cryptocurrency industry. 

During the initial court hearing for the insolvency case on November 22, Tuesday, a lawyer for the company provided a verdict of FTX, as well as its leadership. The lawyer stated that Bankman-Fried runs the company as a private fiefdom. 

Binance stated the vehicle is not a financing fund and it’s meant to encourage firms and projects experiencing significant, short-term monetary difficulties. Zhao stated that he intended to stop further falling contagion effects halting the collapse of FTX. 

Binance stated that it expects the plan will last about six months. It’s accepting applications from shareholders to provide further funds. About 150 companies applied for assistance from the recovery fund, as per Binance. 

Cryptocurrency markets didn’t react considerably to the news. In the previous hour, Bitcoin of BTC boosted by about 0.2%, while Ether traded flat during the session. Experts expect thin exchange volumes in the United States or the US because of the Thanksgiving holiday.