The bankruptcy of the struggling crypto exchange FTX continues to shadow the crypto industry.
As a result of the FTX failure, Binance, the world’s biggest blockchain ecosystem, just launched a $1 billion recovery fund. It said the newly increased fund was allocated to the recovery fund’s initial promises. And the corporation is not stopping there, as it may expand its initial contributions to the recovery fund to $2 billion “if the need arises.”
This fund was established to ensure and give any support to suffering market participants.
According to CNBC, several crypto-native investment firms, including Jump Crypto, Polygon Ventures, and Animoca Brands, have contributed approximately $50 million to their respective commitments. “We do this transparently,” stated Binance CEO Changpeng Zhao.
The decision was made to increase the present amount of money to the recovery fund to ensure the smooth operation and flow of operations and work in the industry. According to CNBC, the crypto market has seen the appearance of a savior-like figure, Zhao, who has invested in several struggling crypto startups, including Voyager Digital and BlockFi.
Binance stated unequivocally that the fund “is not an investment fund,” as its sole purpose is to provide assistance and support to businesses and projects. It went on to say that the fund is for companies who are “facing significant, short-term financial challenges through no fault of their own.” Zhao wishes to avert any more “cascading contagion effects” from the FTX disaster.
The fund is planned to last roughly six months and is open to receiving proposals from contributors to allocate more funds. Binance stated that it is “flexible in terms of investment structure.”
According to CNBC, over 150 companies have already submitted applications to benefit from the fund.
“We expect that individual situations could require tailored solutions,” Binance stated.
Meanwhile, Bybit, the 35th largest exchange by trading volume, joined Binance on Thursday by launching a $100 million fund to serve institutional clients, according to Coindesk. The decision was made “during this challenging period in the crypto industry,” according to the statement.
In addition, according to an email statement obtained by coindesk.com, Bybit will offer around $10 million to existing and new market makers on its platform and specialized account managers.