Investing.com – Binance, the world’s largest cryptocurrency exchange by trading volume, yesterday announced the creation of a $1 billion fund to support struggling cryptocurrency players in the crypto industry, and mitigate the impact of potential future crises similar to the recent FTX bankruptcy.
So Binance stated on its blog that it will commit $1 billion in initial commitments to the recovery fund, and that amount could be increased to $2 billion in the long term, “if the need arises.”
Binance also announced that it has received $50 million in equity commitments from companies in the crypto space, including Jump Crypto, Polygon Ventures, and Animoca Brands.
Binance CEO Changpeng Zhao, aka CZ, shared the address of the fund’s public wallet, emphasizing: “We do this transparently.”
Shared wallet analysis confirms a balance of close to $1 billion in stablecoin issued by blockchain infrastructure company Paxos and approved and regulated by the New York State Department of Financial Services.
Note that this fund is an attempt by Binance and CZ to restore a modicum of confidence in the cryptocurrency industry, a confidence that was greatly undermined in 2022 with the collapse of TerraUSD, LUNA, and most recently FTX and its platform.
So Binance clarified that it is “not an investment fund”, but a reserve that supports companies, “through no fault of their own, who are facing significant and short-term financial difficulties.”
The company also made it clear that this program will be time-limited and will last 6 months, and still accept contributions whether in cryptocurrency, cash or debt.
Regarding the potential beneficiaries of the fund, Binance said it expects “individual situations will require tailored solutions,” and noted that at least 150 companies have already applied to benefit from it.