Binance CEO Chanpeng Zhao on Monday said that his exchange will constitute an industry recovery fund to prevent the cascading effect of FTX and hurt the crypto industry further.
“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,” he said in a tweet.
He invited other industry players to participate in the fund and rebuilt the industry.
Media reports said that Tron founder Justin Sun was the first to endorse CZ’s proposal and pledged his participation in the initiative. Sun said his other firms – Huobi Global and Poloniex – will also support the fund.
Binance’s industry recovery initiative comes in the wake of FTX filing for Chapter 11 bankruptcy protection and a slew of companies claiming to have their funds trapped bankrupt FTX.
The fall of FTX preceded a public announcement by CZ on Twitter that Binance is liquidating all its FTT holdings. And soon 23 million FTT tokens worth $583 million were off-loaded on Binance. CZ said his decision to dump FTT was in the light of revelations and part of risk management, learning from the Luna experience.
CZ’s reference to “revelations” was about media reports that said FTX’s sister concern Alameda Research had overexposure to FTT.