Binance’s founder and CEO said the company’s cryptocurrency rescue fund will initially have $1 billion to distribute as it acts as the industry’s white knight.
during an interview BloombergChangpeng ‘CZ’ Zhao said the fund would be structured “loosely” and publicly visible on the blockchain, allowing other industry players to contribute.
He promised to release more details Binance Blog issued, and the fund will be up and running as soon as possible.
“The industry needs to save now, not in 2023,” he said.
CZ said the team would then evaluate what to do with the $1 billion before potentially injecting more cash.
“Basically, we’re looking at setting up $1 billion first, and if that’s not enough, we’ll allocate more. If there’s unspent funds in six months and there aren’t as many projects — and hopefully the industry has recovered by then — we’ll It can be withdrawn.”
The exchange’s executive first announced the launch of an “industry recovery fund” on Nov. 14 to support “otherwise strong but in a liquidity crisis” companies affected by FTX. At the time, BankToTheFuture CEO Simon Dixon and founder of Tron Justin Sun announced that they will also contribute to the fund. However, it’s unclear whether they actually contributed.
Binance Eyes FTX’s Distressed Assets
CZ also confirmed that some troubled cryptocurrency projects acquired by now-bankrupt exchange FTX may be on the fund’s shopping list, but did not say which ones.
“We definitely want to look at these assets,” he said. “They’ve invested in a lot of different projects, some are okay, some are not, but I think there are a lot of assets that can be salvaged. We’ll look at them carefully when they become available.”
Sam Bankman-Fried’s firms, including FTX and hedge fund Alameda Research, made acquisitions and bailouts earlier this year in the wake of Terra’s debacle and the ensuing pain in the cryptocurrency industry.
Cryptocurrency lender BlockFi took credit from FTX.US over the summer and is now considering initiating its own bankruptcy proceedings due to the exposure. It has held talks with Binance about possible help.
Meanwhile, Voyager Digital, which accepted FTX’s $1.4 billion offer for its distressed assets in September, is now looking for another buyer.
As recently as September, SBF claimed that FTX had $1 billion ready for more acquisitions. For a while, there were even rumors that he was considering acquiring publicly traded trading app Robinhood.
SBF’s fall from grace now puts CZ in the role of industry savior, even though the Binance CEO indirectly criticized FTX’s strategy before June’s blog post.
“Don’t let bad companies last long,” he wrote at the time, “let them fail.”