One of the world’s biggest cryptocurrency exchange platforms Binance has announced its commitment of $1 billion to aid struggling crypto platforms to stay afloat in the wake of FTX’s upheaval.
Binance further disclosed that it may likely increase the amount to $2 billion in the future if the need arises, as it is committed to reviving the dwindling crypto industry.
Binance CEO Changpeng “CZ” Zho while disclosing the company’s commitment, posted the link of its $1 billion support to the industry which he stated was done to promote transparency.
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He wrote on his Twitter handle,
“We do this transparently.
“The public address for Binance’s initial commitment of BUSD 1 billion is: 0x043a80999cEe3711D372FB878768909fbE7F71E6”
He further disclosed that other participants’ addresses will be released over the next week.
So far, Polygon Ventures, Jump Crypto, Kronos, GSR, Animoca Brands, Brooker Group, and Aptos Labs have shown commitment with an initial aggregate commitment of around USD 50 million, as more participants are still expected.
With a responsibility to lead the charge in the protection of consumers’ interests and rebuilding the industry, Binance announced that the Industry Recovery Initiative (IRI) is a new co-investment opportunity for organizations eager to support the future of Web3, which will also permit struggling cryptocurrency companies to request financial support.
Binance stated that it has already received 150 support applications from various companies in need, noting that the program is expected to last for six months. It further disclosed that those who contributed funds that remained unused will be able to withdraw those funds at the end of the initiative.
Binance specified that the initiative was not an investment fund, drawing a distinction between the initiative and Binance Labs the company’s VC arm that it uses to invest in new startups.
Aside from funding support, Binance plans to provide founders and projects with comprehensive support, from formation, technical execution, fundraising, and more so that they can emerge and grow stronger from the crypto winter.
Recall that Binance last week had announced the setting up of an ‘Industry Recovery Fund’ following the collapse of FTX which shook the crypto industry and also led to a crypto liquidity crisis.
In a bid to reduce further cascading negative effects of FTX collapse, Binance announced that it was forming an industry recovery fund, to help projects who are otherwise strong but in a liquidity crisis
The FTX which has already filed for bankruptcy is currently under investigation by a group of agencies, including the U.S. Justice Department and the Securities and Exchange Commission.
Due to its collapse, the cryptocurrency market has come under pressure over the last two weeks as it has remained on the edge because crypto investors are unclear about how the FTX saga will end, whether there will be further contagion across the industry.
Ever since reaching astronomical highs in November 2022, cryptocurrencies have been on the downfall, with Bitcoin going from $69,000 to around $18-20 thousand.
Bitcoin (BTC) withdrawals have hit a record rate of 106,000 monthly, indicating that customers may be losing trust in third-party services.
With Binance Industry recovery fund initiative, the crypto exchange platform has no doubt positioned itself as a big brother in the industry, as it seeks to protect other platforms from the risk of bankruptcy, as well as protect investors’ interests by filling the void created by FTX.