Connect with us




Business and Brands

Binance commits another $1 billion to crypto recovery efforts

Binance commits another $1 billion to crypto recovery efforts

Published

on

Binance commits another $1 billion to crypto recovery efforts

Early Friday morning, Binance CEO Changpeng Zhao said the company committed another $1 billion to its relief efforts aimed at helping troubled businesses in the crypto industry.

Binance’s efforts have been accelerated in the wake of FTX’s collapse earlier this month, which resulted in the company, once valued at $32 billion, filing for bankruptcy protection and leaving the crypto industry frozen in its wake.

Earlier this month, Binance walked away from a purported deal to buy FTX.

Binance’s recovery efforts are targeted at distressed opportunities in the industry and already has 150 applications from companies seeking support, according to the company.

Advertisement

Earlier this year, Binance committed $1 billion to the Secure Asset Fund for Users, or SAFU, a crypto insurance fund the company established back in 2018.

With no support or interest in bailouts from central banks, crypto firms have no choice but to look to these recovery funds as the crypto sector’s largest current relief source.

“Each investment opportunity will be reviewed on its own merits by each [industry recovery initiative] participant acting on its own behalf, including appropriate legal assessments,” a Binance spokesperson told Yahoo Finance.

READ ALSO:   Why New Bitcoins Will Not Reduce Bitcoin Value- Binance Founder

To date, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have also committed to participating in the IRI, adding an initial aggregate commitment of $50 million. Notably, Jump Crypto, Animoca Brands and GSR have all disclosed exposure to FTX without offering a financial figure to the loss.

Advertisement
FTX CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on Friday, June 4, 2021. (Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images)
FTX founder and former CEO Sam Bankman-Fried attends a press conference at the FTX Arena in downtown Miami on Friday, June 4, 2021. (Matias J. Ocner/Miami Herald/Tribune News Service via Getty Images)

The fact that Binance is assuming the role as one of crypto’s last remaining lifelines is a welcome sign, according to Conor Ryder, a research analyst with crypto analytics firm Kaiko.

While the initiative carries some of the hallmarks of FTX assuming a similar role over the summer, Ryder told Yahoo Finance this latest effort carries a few key differences.

READ ALSO:   Turkey Bans Use Of Cryptocurrencies, Cites Risks

The fund is linked to a public wallet address, meaning “no more opaque relationships between exchanges and their investments,” according to Ryder.

Earlier this week, the Wall Street Journal reported that Binance, along with Apollo, was approached by crypto prime broker Genesis Trading, which has been seeking emergency funding since its lending business suspended withdrawals on November 16.

Binance said it walked away from the offer as some of Genesis’ business lines potentially posed a conflict of interest to its own. As of this morning Binance has told Yahoo Finance that position hasn’t changed.

Advertisement

“It was reassuring to see Binance turn down the offer,” Ryder added. “Conflict of interest seemed to be something FTX specialized in, in hindsight, so the reluctance to enter into an ambiguous relationship is encouraging.”

READ ALSO:   Elon Musk's cryptic Halloween tweet sends doge soaring

On Tuesday, FTX legal counsel in court called the exchange’s collapse earlier this month, “the most abrupt and difficult collapse in the history of corporate America.

Court filings have shown FTX owes its top 50 creditors $3.1 billion in total.

Advertisement

Also Read...