Binance Allocates $1 Billion To Support The Crypto Industry

Twitter icon  •  Published vor 2 Monaten  •  Nikolas Sargeant

The company plans to devote $1 billion in initial commitments to the recovery fund

The co-founder and CEO of Binance, Changpeng Zhao (CZ), have spoken publicly in various interviews, giving his outlook on the cryptocurrency market's future following a difficult year. The collapse of FTX has cast a further shadow over the industry, with the industry’s pioneering currency, Bitcoin dropping to the new lowest it’s been in 2 years, hovering around $16,000.

Binance To Support The Industry

FTX went bankrupt just a few weeks ago, leaving in its wake a huge sense of doubt about the industry's future. Binance now holds a huge majority of the overall market, and as the industry leader, the crypto firm has announced new details about its recovery fund. 

In a blog post published on the Binance site, the company plans to devote $1 billion in initial commitments to the recovery fund. Given the recent turbulent nature of the markets, Binance stated that the fund might increase to $2 billion “if the need arises” down the line. The exchange has also received $50 million in commitments from major crypto investment firms such as Animoca Brands, Jump Crypto, and Polygon Ventures.  

Given the lack of transparency from the big names in the industry, namely Do Kwon and Sam Bankman-Fried, Changpang shared the public wallet address as proof of the initial commitment stating, “we do this transparently.” The wallet address shows a balance of around $1 billion in BUSD stablecoin, the firm’s native token, which is approved and regulated by the New York State Department of Financial Services. 

Why Are Binance Deploying The Funds?

Binance has allocated these funds to keep the crypto industry afloat amidst the persistent ‘crypto winter’ and the highly controversial collapse of FTX. Bankman-Fried was the go-to guy in the States and had become a voice of reason and visionary for many investors. 

FTX’s former CEO had spent much of 2022 expanding the company’s reach into nations across the globe, setting up offices, and investing in struggling crypto firms such as BlockFi and Voyager Digital. These kinds of ambitious expansions may have been part of what led to the collapse, which CZ highlighted via Twitter during the week leading up to Bankman-Fried filing a Chapter 11. 

In light of FTX’s mistakes, Binance has declared that the allocated BUSD “is not an investment fund” and is in place to support companies and projects “through no fault of their own, are facing significant, short-term, financial difficulties.” 

The crypto firm is accepting applications from companies and investors to contribute additional funds—accepting contributions in tokens, cash, and debt, stating that it is “flexible on the investment structure.” According to Binance, some 150 companies have already applied to support the fund.

Author

Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.

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