Ever since the collapse of the crypto exchange FTX, Binance chief Changpeng Zhao has been actively working to set up a recovery fund to help distressed, yet fundamentally strong firms. Besides, Binance has also doubled its fundraise plans from $1 billion to now at $2 billion.
During his interview on Thursday, November 24, Zhao said that the crypto recovery fund will have co-investors to back crypto projects facing a liquidity squeeze. “We’re going with a loose approach where different industry players will contribute as they wish,” he said.
Some of the popular names like Polygon Ventures, Jump Crypto, Animoca Brands, Aptos Labs, Kronos, GSR, and Brooker Group have already made a combined pledge of $50 million. The Binance chief said that he is looking to limit the damage to the crypto sector from the implosion of FTX.
Binance hasn’t confirmed yet how much it is willing to put. But sources said that Binance’s prospective contribution far outweighs the commitments made by other firms. David Adams, portfolio manager of the King River Digital Assets Fund Told Bloomberg:
“The market will be watching the fund’s public wallet address closely to see whether it attracts a material amount of non-Binance capital, as this will indicate how broad-based the industry support is for stabilization”.
Zhao’s Credibility At Stake With Crypto Recovery Fund
Although the Binance chief is taking this opportunity to build his credibility in the crypto space, the fact that his tweets triggered the turn of events at FTX has sparked a few questions. Some lawmakers from the UK Parliament have also asked Binance to explain the circumstances surrounding Zhao’s tweets on November 6.
The lawmakers are keen on knowing whether the company understood the impact of those tweets. Hayden Hughes, chief executive of social-trading platform Alpha Impact said:
“There’s too much uncertainty in the market for the recovery fund itself to be the catalyst that turns everything around. We still don’t know the extent of the contagion. But I think we are at or close to the bottom and I don’t expect markets to go down much from here.”
On the other hand, regulatory tensions with Binance continue to be there since the exchange has licenses in several jurisdictions with no formal base anywhere.
The post Binance Chief Doubles the Target for Crypto Recovery Fund to $2 Billion appeared first on CoinGape.
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