The collapse of the embattled crypto exchange FTX is still haunting the crypto industry. Several crypto firms have tightened their belts to avert any impending disaster like that of the FTX, anytime in the near future. On November 24, the world’s leading blockchain ecosystem, Binance, announced a recovery fund of $1 billion following the FTX failure early this month. It said that the newly added fund was devoted toward the initial commitments to the recovery fund. And the company is not going to stop just there, as it may further increase the amount to $2 billion in its initial commitments to the recovery fund “if the need arises.”
This fund was announced with the intention of ensuring and extending any assistance to struggling market players.
According to a CNBC report, several other crypto-native investment firms, such as Jump Crypto, Polygon Ventures, and Animoca Brands have contributed about $50 million to their respective commitments. Binance CEO Changpeng Zhao said, “We do this transparently.”
The decision to add the current amount of money to the recovery fund has been made to ensure smooth functioning and an easy flow of activities and work in the industry. This is happening after Sam Bankman-Fried’s company, FTX, was forced to file for bankruptcy. The crypto industry witnessed an emergence of a saviour-like figure, Zhao, who has put money in a lot of struggling crypto firms, such as Voyager Digital and BlockFi, reported CNBC.
Binance clearly asserted that the fund “is not an investment fund,” as its only aim is to extend help and support to companies and projects. It added that the fund is for those companies that, “through no fault of their own, are facing significant, short term, financial difficulties.” Zhao wants to stop any further “cascading contagion effects” emanating from the FTX meltdown.
The fund is expected to continue for about six months, and it is open to accepting applications from contributors to devote more funds. Binance said it “is flexible on the investment structure.”
CNBC reported that about 150 companies have already submitted their applications to avail themselves of the fund so far. Binance stated, “We expect individual situations to require tailored solutions.”
Meanwhile, on Thursday, crypto exchange Bybit, the 35th largest exchange by trading volume, also joined Binance by announcing a $100 million fund in its move to support institutional clients, reported Coindesk. It said the decision was taken “during this challenging period in the crypto industry.” In addition to this, Bybit will offer about $10 million to existing and new market makers on its platform, as well as dedicated account managers, as per the company’s email statement reported by coindesk.com.
The company’s CEO and co-founder Ben Zhao said, “We are all in this together, and it’s up to everyone to do what they can to support our industry, and this is one way we are helping to give back.”
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