Binance Contributes $1 Billion to the Crypto Market Recovery Fund
Thursday, the main exchange said that it had a “duty to lead the fight in safeguarding customers and rebuilding the sector.”
In order to do this, it has formed the Industry Recovery Initiative (IRI), which will enable failing bitcoin firms to seek financial assistance.
Binance has given $1 billion worth of cryptocurrency to the project, with the option to extend its contribution to $2 billion if necessary. According to the firm, it has already received 150 help requests from companies in need.
The IRI also accepts donations from other businesses. Several participants, including Polygon Ventures, Animoca Brands, Jump Crypto, Aptos Labs, GSR Markets, Kronos, and Brooker Group, have already contributed $50 million to the scheme.
Binance said that it anticipates additional partners to join in the near future and is working on a mechanism for conventional financial institutions to join the project without utilizing cryptocurrency.
Changpeng “CZ” Zhao, CEO of Binance, remarked on the project on Twitter, stating, “We are honest.” He published a link to Binance’s first pledge of 1 billion BUSD, which is kept at a BNB Chain address beginning with 0x043a.
The duration of the program is estimated to be six months. Those that give unused cash will be able to withdraw them at the conclusion of the program.
Binance clarified that the effort was not an investment fund, distinguishing it from Binance Labs, the exchange’s venture capital arm that invests in emerging firms.
Binance did not mention FTX outright in its statement today. Given the timeframe, it is evident that the collapse of the exchange (and the subsequent ripple impact on other businesses) led to the formation of the fund.
This is not Binance’s only attempt to save the cryptocurrency sector. Recent rumours suggest that the company aims to purchase the insolvent lending company Voyager Digital and may also acquire Genesis Capital’s loan assets.
Due to claims that FTX mismanaged client assets, Binance almost purchased FTX during the exchange’s demise but backed out of the transaction.