Binance targets $1 billion for 'industry recovery fund'
Crypto exchange operator Binance is aiming to amass around $1 billion for its recently announced "industry recovery fund."
CEO Changpeng "CZ" Zhao discussed the plan on Bloomberg Television on Thursday, and a Binance spokesperson later confirmed it in a message to The Block. "If that's not enough we can allocate more," Zhao said.
He first announced the fund last week to help mitigate fallout stemming from FTX's collapse. The fund will target projects which are otherwise strong, but facing a liquidity crisis.
Binance will follow a "loose structure" for the fund where different industry players can contribute as they wish, Zhao said. Contributors will have to send funds to a blockchain address that the public can view, he added. A detailed blog post about the fund is expected to be published soon.
The crypto industry is reeling under pressure from the collapse of FTX, the exchange formerly run by Sam Bankman-Fried. Zhao's tweets highlighting concerns about the health of FTX, a rival, and its sister firm Alameda Research earlier this month helped spur both firms' collapse. Zhao said today that he tweeted "too late" about FTX's problems.
"I think as an industry we let FTX got too big before we started questioning some of those things," Zhao said. "So I'm taking the approach where we ask questions much earlier. It does not mean any attacks on any of our industry peers. We just want to get more transparency and more scrutiny into the industry."
Zhao also raised concerns about rival Coinbase in the Bloomberg interview. He said Coinbase's financials are not on a blockchain, "which is actually the most transparent way to display information." Zhao's comments came in response to a now-deleted tweet where he questioned Coinbase Custody's bitcoin holdings.
Zhao had referenced a Yahoo Finance article that said that "Coinbase Custody holds 635,000 BTC on behalf of Grayscale." He added in the tweet, "4 months ago, Coinbase (I assume exchange) has less than 600K," with a link to a 4-month-old article from Bitcoinist. Zhao had also clarified he was simply quoting "news reports" and not making any claims of his own. But his tweet was misinterpreted by observers in the crypto community and he ultimately deleted it, Zhao said today.
After FTX's downfall, there will be "a little bit" more contagion, but the overall industry is "fine," Zhao said.
Meanwhile, early on Nov. 24, crypto exchange Bybit also announced the launch of a $100 million support its market maker clients. “The fund will offer a helping hand to Bybit’s dedicated institutional clients with a maximum of up to $10 million per client available and is intended to support the industry as the fallout from recent events continues,” Bybit said.
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