Binance to create industry recovery fund after FTX collapse
Binance, the world’s largest crypto exchange, plans to set up an industry recovery fund to help firms in trouble following the collapse of FTX.com last week.
In a tweet, Binance said the fund would help projects, which are otherwise strong, but in a liquidity crisis.
The aim of the fund is to reduce further “cascading negative effects of FTX.” It said it would announce further details shortly.
FTX.com said it has filed for bankruptcy protection in the U.S. on Friday and its CEO Sam Bankman-Fried stepped down.
The company said that FTX.com and 130 related entities are included in the bankruptcy filing in the District of Delaware. These include Alameda Research.
John J. Ray III has been appointed as CEO. The release said that many employees will remain to help ray and independent professionals during the bankruptcy proceedings.
The bankruptcy followed a tumultuous week in the crypto world that started with Binance saying it would offload all of its holdings in rival FTX. Binance then said it had been asked to bail out its rival, however, it walked away from a tentative transaction after due diligence revealed a gaping hole at the centre of its finances.
FTX said it needed an immediate cash injection of at least $4 billion to stay afloat, however, media reports have said that the shortfall at the exchange may be as much as $8 billion.
The case has triggered a further plunge in crypto prices and calls for regulation of the industry.
Binance calls for global standards
Binance CEO Changpeng Zhao has said that his fund will help to spearhead a push for global standards in the wake of the FTX collapse.
“As an industry we need to increase transparency,” Zhao was cited as saying by Bloomberg at a conference in Bali, Indonesia. “We need to work very closely with regulators all around the world to make this industry more robust. There is a strong role for regulators to play but we can’t blame this on any single party.”
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