HomeCrypto StartupsBinance CEO announces the launch of an "industry recovery fund" for cryptocurrencies.

Binance CEO announces the launch of an “industry recovery fund” for cryptocurrencies.

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Sam Bankman-Fried, the creator of FTX, saved the cryptocurrency market six months ago by bringing life and liquidity to dormant investment platforms. Changpeng Zhao’s turn is now.

The CEO of Binance announced on Monday that his exchange will establish an “industry recovery fund” to assist crypto businesses that have been left cash-strapped by the demise of FTX, which filed for bankruptcy on Friday along with its founder Sam Bankman-Fried’s hedge fund Alameda Research and more than 130 other affiliates.

Mr. Zhao provided scant information during a meeting on Twitter Spaces (NYSE:TWTR), despite claiming that “four or five” institutions had shown interest in supporting it. He did not provide information on the size of the fund or the source of its assets.

The failure of FTX will prevent “a number of promising ventures,” according to Zhao. “Little evil has been done by them… We’d want to see these initiatives continue.”

The valuations of the majority of these companies are much more reasonable than they were a year ago, Zhao clarified, adding that he plans to use the fund he is offering to inject equity into businesses that he thinks are deserving of support.

He avoided mentioning specific businesses, but after the FTX debacle, a number of well-known exchanges encountered liquidity issues that led many cryptocurrency investors to resume trading in the market’s safety. Fiat currency Tether’s circulating market cap, the largest stablecoin network in the world and a rough gauge of the worldwide adoption of cryptocurrencies, has dropped over 5% in the last two weeks to $66.2 billion, its lowest level since August.

Zhao agreed that there were some minor customer outflows from Binance, but he claimed that was typical during times of high volatility. Since the beginning of the month, the outstanding value of the native Binance BNB token has decreased by 13%.

Zhao’s choice is consistent with the steps taken by FTX earlier this year after stablecoin Terra/Luna crashed, bringing down the hedge fund as well as the investing platforms Celsius, BlockFi, and Voyager Digital. Three Arrows Capital, a Hong Kong-based company. After Chapter 11 bankruptcy procedures were complete, FTX agreed to buy out some of Voyager’s assets and “rescued” BlockFi by giving it credit facilities totaling around $650 million. These two projects are no longer relevant.

He also reaffirmed his charge that Bankman-Fried lobbied US regulators against other sectors of the cryptocurrency industry. This accusation, which some claim sparked Zhao’s decision to stop funding FTX’s Binance, is what led to that company’s collapse.

On the call, the CEO of Binance was questioned about claims that he contributed to a breakdown that threatened to defraud thousands of FTX consumers of their money. He emphasized that his goal was to defend Binance’s position rather than tear down a rival. Investors in FTX were admonished by him to take personal accountability for their decisions.

When Binance’s CEO strongly implied that he thought SBF was responsible for the publication of a Reuters report last week that claimed Iran had used the Binance network to evade US sanctions in recent years, it was another indication of the hostility between Zhao and Bankman-Fried.

Zhao asserted that “we have evidence” that data from Currency.com, an exchange in which FTX had invested, was used to sway the Reuters report.

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