Binance CEO Announces ‘Industry Recovery Fund’ Amid FTX Collapse

Binance CEO Announces ‘Industry Recovery Fund’ Amid FTX Collapse

Binance, a global cryptocurrency exchange, is setting up an industry recovery fund to "reduce the further cascading negative effects of FTX," said CEO Changpeng Zhao (CZ). "As an industry, we need to increase transparency," the executive said. "We need to work closely with regulators all around the world to make this industry more robust."

Binance Sets Up ‘Industry Recovery Fund’

Following the collapse of cryptocurrency exchange FTX, Binance announced that it is forming a recovery fund for the crypto industry. CEO Changpeng Zhao (CZ) tweeted early on Monday morning:

"To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund to help projects that are otherwise strong but in a liquidity crisis."

"We also welcome other industry players with cash who want to co-invest," the Binance boss added. "Crypto is not going away. We are still here. Let’s rebuild."

Crypto exchange FTX filed for Chapter 11 bankruptcy on Friday. Before the bankruptcy filing, Binance was considering acquiring the rival crypto exchange. However, after performing due diligence, the company decided to walk away from the deal, citing reports of FTX mishandling customer funds and investigations by US authorities.

CZ Likens FTX Fiasco to the 2008 Financial Crisis

At a fintech conference in Indonesia on Friday, CZ spoke about cryptocurrency regulation and his company’s efforts to set global standards for cryptocurrency in collaboration with other industry players.

He likened the FTX fiasco to the 2008 financial crisis, warning of cascading effects. The Binance chief said at the conference:

"As an industry, we need to increase transparency. We need to work very closely with regulators all around the world to make this industry more robust. There is a strong role for regulators to play, but we can’t blame this on any single party."

The Binance executive noted that the crypto "industry is still growing" and "we are still building." 

However, it remains to be seen how effectively the fund will be utilized in a crisis. Please comment.