Leading cryptocurrency exchange Binance has allocated another $1 billion to its recovery fund, thereby increasing the fund to $2 billion. Industry behemoths like Aptos Labs and Jump Crypto have joined the Binance Labs initiative which was announced almost two weeks ago.
Markedly, all of these funds contributed towards the crypto firm recovery project are held in BUSD, a United States dollar-pegged stablecoin.
It is no longer news that leading digital assets service provider Binance launched an industry recovery fund for troubled exchanges. The recovery fund was launched after Binance pulled out from its initial plan to acquire the now-bankrupt FTX Derivatives Exchange. While it had plans of helping troubled firms, it was stated that such firms must be strong crypto projects.
Before now, Tron founder Justin Sun and Simon Dixon, CEO of BnkToTheFuture have already signalled interest in joining Binance’s initiative. Changpeng Zhao ‘CZ’, Chief Executive Officer (CEO) of Binance announced the target of the fund as $1 billion or more. He equally said that if the $1 billion was not enough, more funds would be added.
Crypto Juggernauts Contribute $50M to Recovery Fund
CZ said that the exchange will follow a “loose approach where different industry players will contribute as they wish.” Alongside Aptos Labs and Jump Crypto, many other crypto industry juggernauts will contribute $50 million to the fund.
Eventually, all of these funds will go into the acquisition of assets which belong to crypto firms facing a liquidity crisis. Notably, the industry recovery fund is solely aimed at achieving stability in the crypto industry.
Sadly, the crypto winter which started over eight months ago has thickened yet again with the implosion of the FTX exchange. A few days after Binance announced plans to sell off its FTX token (FTT) in bits, Alameda Research made a bid to buy out all the token holdings. In response, Binance refused the offer, saying that it only wanted to sell the tokens gradually.
Shortly after the episode, the FTX Derivatives Exchange began to stagger due to the mismanagement of customers’ deposits. Next, Binance signed a letter of intent to acquire the troubled exchange but subjected the agreement to due diligence. The results of the corporate due diligence caused Binance to have a change of heart about the acquisition.