Binance launches a recovery fund for cryptocurrency projects facing a liquidity crisis.
The cryptocurrency industry witnessed the collapse of the cryptocurrency empire. exchange FTX last week. FTX was the second largest cryptocurrency exchange by trading volume at the time, behind Binance, and the entire episode surrounding this huge crash has left cryptocurrencies shivering like the price of Bitcoin.
This is why the sector is facing a very difficult time, with a possible increase in legal problems and a great deal of mistrust that could derail the entire market, as other exchanges are expected to be affected.
This is why the CEO of Binance, Changpeng “CZ” Zhao, says his exchange is setting up a recovery fund to help rebuild the industry. CZ said more details will be announced in the coming days, saying the fund is open to industry co-investors.
“To reduce the negative cascading effects of FTX, Binance is forming an industry recovery fund, to help projects that are otherwise strong but in a liquidity crisis. More details to follow soon. In the meantime, please contact Binance Labs if you think you may qualify.”Explain.
With all this, Binance has shown its commitment to ensure that the cryptocurrency community receives as much support as possible. His latest decision to provide a background recovery for endangered cryptocurrency projects is another step in this direction.
We say it is another step as this announcement comes a month after Binance Pool said it will use $500 million in loan for miners from Bitcoin in difficulties.
“We will try to bring the other industry players together to form a global industry association, and try to address some of the common norms in the business,” CZ said, citing recent cryptocurrency market events as a reason for the initiative to happen “very soon.”adds CZ.
Are we facing a successful move by Binance?
This is one of the big questions since little else is known about this movement of the exchange. Even so, CZ is clear: “Cryptography is not going away. We are still here. We are going to rebuild.”
To this we must add that some experts have also raised concerns about how to distinguish between someone who really has a cash problem and someone who is a fraud and wants to take advantage of the aid.
“You can’t back billions in offside liabilities without first fixing Ponzi business models. This sector fund seems silly or a bad call”explains Sean Penso, managing partner at Cortelyou Capital.
Despite this, which we hope will see some kind of regulation, several prominent figures in the world of cryptocurrencies, such as the founder of Tron, Justin Sun, and the CEO of BankToTheFuture, Simon Dixon, they have already expressed their willingness to join the initiative.
