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Cryptocurrency exchange Binance on Thursday announced new details about its industry recovery fund, which aims to support struggling players in the wake of the disastrous FTX bankruptcy.
In a blog post, Binance said it will commit $1 billion in initial commitments to a recovery fund. The company added that it may increase this amount to two billion dollars at some point in the future “if the need arises.”
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It also received $50 million in commitments from original investment firms including Jump Crypto, Polygon Ventures, and Animoca Brands.
Binance CEO Changpeng Zhao shared a public wallet address showing his initial commitment and said, “We are doing this transparently.” Public blockchain data reviewed by CNBC showed a balance of about $1 billion in Binance’s BUSD stablecoin.
BUSD is a stablecoin issued by blockchain infrastructure company Paxos and approved and regulated by the New York State Department of Financial Services, according to the Paxos website.
The fund is Binance’s attempt to keep the cryptocurrency industry afloat after controversial entrepreneur Sam Bankman-Fried’s exchange FTX filed for bankruptcy earlier this month.
Zhao has emerged as a new savior-like figure for the ailing industry, filling the void left by Bankman-Fried, whose firm bought or invested in a number of beleaguered crypto companies — from Voyager Digital to BlockFi — before their collapse.
The FTX failure was caused in part by a tweet from the CEO of Binance that drew attention to a CoinDesk report that raised questions about its accounts. Since FTX’s rapid decline two weeks ago, investors have been concerned about a possible crypto infection affecting every corner of the industry.
In the first court session of the bankruptcy case on Tuesday, the company’s attorney issued a judgment condemning FTX and its leadership, saying the company is being run as a “personal fiefdom” of Bankman Fried.
Binance said the tool is “not an investment fund” and is intended to support companies and projects that “through no fault of their own, are experiencing significant and short-term financial difficulties.” Zhao previously said that he intends to prevent further “cascading infection effects” from the collapse of FTX.
Binance said it expects the program to last about six months. Accepting requests from investors to contribute additional funds.
Binance said it is “flexible in terms of investment structure” and accepts contributions in tokens, cash and debt. “We expect that individual situations will require customized solutions,” the company added.
Binance said about 150 companies have already applied for support from the fund.
Cryptocurrency markets did not react significantly to the news. in the past hour, bitcoin It rose around 0.2%, while ether traded flat during the session.
Volumes are expected to be thin in the US as Americans celebrate the Thanksgiving holiday.