July 15, 2024

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Binance says it will set up US$1 billion ‘recovery’ fund for distressed crypto businesses

Binance says it will set up US billion ‘recovery’ fund for distressed crypto businesses

Binance, the world’s largest cryptocurrency exchange, said it will establish a US$1 billion fund for its “Industry Recovery Initiative” to mitigate the damage from the collapse of the FTX exchange, according to a Thursday blog post. 

See related article: Crypto exchange Bybit establishes US$100 million fund to aid institutional clients

Fast facts

  • Binance CEO Changpeng Zhao first announced the launch of an industry recovery fund on November 14 to help firms that “are otherwise strong but in a liquidity crisis” following the bankruptcy of cryptocurrency exchange FTX.
  • Binance posted its initial commitment, which shows 1 billion Binance USD (BUSD), a fiat-backed stablecoin issued by Binance and blockchain infrastructure platform Paxos. 
  • The exchange said the commitment may increase to BUSD 2 billion depending on need.
  • According to Paxos, BUSD is approved and regulated by the New York State Department of Financial Services and 100% backed by reserves of fiat cash and U.S. Treasury bills.
  • Binance added that industry participants Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group had committed US$ 50 million worth of assets to the fund, with more expected to join. 
  • In an interview with Bloomberg on Thursday, Zhao said Binance.US would also make a bid for bankrupt crypto lender Voyager Digital, with FTX unable to complete an agreed-upon purchase of the company.

See related article: Binance says it will set up crypto recovery fund, industry standards group