Binance to Establish $1bln ‘Recovery’ Fund for Crypto Firms Facing Liquidity Issues
As per a blog article published on Thursday, Binance, the ‘s major cryptocurrency exchange, would create a $1 billion facility for its “Industry Recovery Initiative” to minimize the harm caused by the unexpected shutdown of the FTX exchange.
After the collapse of cryptocurrency exchange FTX, Binance CEO Changpeng Zhao announced the formation of an industry rescue fund on November 14 to assist enterprises who are “fundamentally solid but in a liquidity crunch.”
Binance has announced its maiden commitment of 1 billion Binance USD (BUSD), a fiat-pegged stablecoin minted by Binance and the blockchain framework firm Paxos. The crypto exchange stated that the contribution might be increased to BUSD 2 billion based on demand.
As per Paxos, BUSD is authorized and supervised by the New York State Department of Financial Services and secured by deposits of fiat currency and U.S. Treasury notes to the fullest extent.
Binance noted that sector players Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have contributed US$ 50 million worth of investments to the initiative, with further players anticipated to follow.
In a conversation with Bloomberg, Zhao stated that Binance.US will also submit a bid for the insolvent cryptocurrency lender Voyager Digital, since FTX failed to execute the originally planned acquisition.