The Binance chief said that they are willing to allocate more to the recovery fund if required. He added that different industry players can also contribute as they wish.
By Bhushan Akolkar
Updated
3 mins read
Following the collapse of the crypto exchange FTX earlier this month, Binance chief Changpeng Zhao proposed to build a $1 billion recovery fund. Zhao said that this fund will help with the potential bailout or purchase of distressed crypto businesses with strong fundamentals.
During his recent interview with Bloomberg Television’s Haslinda Amin on Thursday, November 24, Zhao said:
“If that’s not enough we can allocate more”.
The Binance chief has been closely watching the FTX collapse unfolding and has been tweeting about his concerns with the crypto space. In fact, it was CZ’s decision to sell all FTX tokens (FTT) which led to uncovering a deeper hole in FTX.
With FTX’s brutal collapse into bankruptcy, CZ has been instrumental in positioning Binance’s position as the world’s largest crypto exchange. He said that the goal of the recovery fund will be to stop any contagion from an FTX-like event in the future.
During his recent interview, Zhao said that they have spoken to a number of industry players. Binance shall soon release a detailed blog post explaining how the recovery fund will function. “We are going with a loose approach where different industry players will contribute as they wish,” he said.
This year’s crypto winter has already eroded more than $80 billion from CZ’s personal fortune which now stands at $15 billion.
The Binance chief has shown some interest in bidding for the assets of bankrupt crypto lender Voyager Digital. Previously, FTX was also reportedly in the race to acquire the assets. However, with FTX itself filing for bankruptcy, Binance’s focus on acquiring the assets has increased.
Now, Binance is competing with its rival crypto trading platform CrossTower Inc. and other companies. There have been reports that Binance has also been in talks for a fresh round of funding in troubled crypto lender Genesis Global. However, sources familiar with the matter said that Binance has refused any such investment citing a conflict of interest in the future.
Zhao believes that if Genesis falls, there will be some difficulties and it shall impact some large institutional players. However, the Binance chief believes that the industry will still survive. “There will be a pain whenever one player goes down,” he said.
At one point, Binance was also interested in acquiring the assets of FTX.com. However, it decided to pull back immediately citing misappropriate use of customers’ funds. “They invested in a number of different projects, some of them are OK, some of them are bad but I think there are certain assets that are salvageable,” Binance’s chief executive said.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
