Binance Promises To Create Crypto Recovery Fund, Calls For Regulation

Binance chief executive Changpeng Zhao said the cryptocurrency exchange plans to launch a fund to help crypto projects facing a liquidity crisis as the collapse of rival FTX ricochets through the industry.

The recovery fund will help “reduce further cascading negative effects of FTX,” Zhao said in a tweet on Monday, targeting projects that are “otherwise strong, but in a liquidity crisis”.

The crypto industry is reckoning with the collapse of rival exchange Sam Bankman-Fried’s FTX, which filed for bankruptcy on Friday after users rushed to withdraw $6 billion in crypto tokens in just 72 hours.

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Zhao said in a tweet on Nov. 6 that Binance would liquidate its holdings of FTX’s native token, FTT, which raised investor concerns about FTX’s balance sheet. Binance said on Nov. 8 it was considering a rescue deal for FTX, later abandoned after due diligence.

Earlier on Monday, Zhao called for new but stable and clear regulations for the industry, in light of recent developments and participants “cutting corners”.

“We’re in a new industry, we’ve seen in the past week, things are going crazy in the industry,” Zhao told a gathering of G20 leaders at a summit in Bali. “We do need some regulations, we do need to do this properly, we do need to do this in a stable way.”