The industry recovery fund, established by cryptocurrency exchange Binance on Thursday to support suffering players in the wake of FTX's disastrous bankruptcy, has added additional information.
Binance stated in a blog post that it will make an initial payment of $1 billion to the recovery fund. The business noted that if the need arose, it may eventually boost that sum to $2 billion.
Additionally, investment companies focused on cryptocurrencies including Jump Crypto, Polygon Ventures, and Animoca Brands have committed $50 million to the project.
We do this honestly, stated Binance CEO Changpeng Zhao as he published the public wallet address demonstrating the company's initial pledge. CNBC's study of public blockchain data revealed that Binance's own BUSD stablecoin had a balance of about $1 billion.
According to the website of blockchain infrastructure provider Paxos, BUSD is a stablecoin that has been certified and governed by the New York State Department of Financial Services.
Binance created the fund in an effort to support the cryptocurrency market after FTX, the controversial exchange founded by businessman Sam Bankman-Fried, declared bankruptcy earlier this month.
Zhao has emerged as a new saviour-like figure for the struggling industry, filling the void left by Bankman-Fried, whose company had purchased or invested in several troubled crypto businesses — from Voyager Digital to BlockFi — before its collapse.
Part of FTX's demise was precipitated by a tweet from the CEO of Binance that called attention to a CoinDesk article casting doubt on its bookkeeping. Investors have been concerned about a potential crypto pandemic infecting every aspect of the sector since FTX's abrupt wind down two weeks ago.
A lawyer for the company offered a harsh verdict of FTX and its leadership during the first court hearing for the bankruptcy case on Tuesday, claiming that the company was governed under "personal fiefdom" of Banker-Fried.
The entity, according to Binance, "is not an investment fund" and is meant to assist businesses and initiatives who "through no fault of their own, are facing serious, short-term financial issues." Zhao has previously stated that he wants to stop the "cascading contagion effects" of the collapse of FTX.
Binance stated that it expects the initiative to run for about six months. Investor applications are being accepted for additional contributions.
According to Binance, it is "flexible on the investment structure" and welcomes contributions in the form of debt, cash, and tokens. He anticipates that unique circumstances will necessitate bespoke solutions.
According to Binance, some 150 companies have already requested assistance from the fund.
The announcement didn't cause the cryptocurrency markets to react particularly. In the past hour, bitcoin \s was up approximately 0.2%, while ether was trading flat for the period. The U.S. is expecting little trading activity as people enjoy Thanksgiving.