Binance To Form Crypto Recovery Fund To Assist Crypto Projects Under Liquidity Crisis
Binance are setting up a recovery fund in order to assist crypto projects & businesses that are going through a liquidity crunch.
The cryptocurrency industry has faced many upsets and crashes over the past month where investors have lost money. In May 2022, the Terra Luna crypto ecosystem crashed, which ended up crashing the whole crypto market for months. More recently, however, the FTX crypto exchange, which is one of the largest exchanges in the world also filed for bankruptcy after the price of their native FTT token crashed and the exchange faced severe liquidity issues. These crypto projects collapsing is not a rare occurrence, as many smaller crypto projects fail and go bankrupt every few days, which ultimately destabilises the larger crypto economy.
Binance CEO Announces Crypto Recovery Fund
In the aftermath of the fall of FTX and its impact on the crypto market which crashed the prices of most cryptocurrencies, Binance CEO, Changpeng Zhao announced on Twitter that Binance would be forming a ‘Crypto Recovery Fund’ in order to support legitimate and fundamentally strong crypto projects that are going through a cash crunch or facing liquidity issues. Binance is also setting up this recovery fund in order to help build trust in the industry and provide backup options for investors and crypto projects when they run into trouble. Announcing the recovery fund through a tweet, CEO Changpeng Zhao said:
‘’To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify. Also welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let's rebuild.’’-Binance CEO, Changpeng Zhao said through Twitter
Zhao said that they would be setting up the crypto recovery fund in order to stop and contain the cascading negative effects of the FTX collapse. Zhao also said that more details on the crypto recovery fund would be coming soon. He also encouraged any crypto projects that were facing a liquidity crisis to approach and communicate with Binance Labs to see if they qualify for assistance. Moreover, other players in the crypto space such as Justin Sun, founder of Tron, Huobi Global and Poloniex would support Binance in setting up the crypto recovery fund. Since this announcement, the prices of cryptocurrencies like Bitcoin and Ethereum have gone up slightly.