Binance recovery fund

The collapse of FTX has left many industry participants devastated (particularly those who weren’t holding their own assets), and there have been many analysts in the crypto space such as Cobie who believe that the entire debacle may have set the entire space back by several years.

As one of the largest exchanges in the world, and with SBF as one of the most well-recognised faces in crypto, the collapse of FTX has not only destroyed tens of billions of dollars in value, but has also left a stain of the crypto industry.

CZ announces the Binance Recovery Fund

The FTX story has many characters, but one who played a large role in shaking the confidence of markets and helping people to wake up to the issues at the company was the CEO of Binance, Changpeng Zhao.

CZ announced that Binance would be selling their $580m of FTT over the course of the coming months after having read the leaked article by CoinDesk that comprised Alameda’s balance sheet.

Now, CZ has announced that Binance is to be building a “recovery fund”, focused on helping some of the most distressed companies in the blockchain space to be able to ensure that they can survive the worst of the bear market – it is also an opportunity for Binance to acquire a lot of crypto assets more cheaply.

What is the Industry Recovery Fund?

Binance’s brand new “industry recovery fund” is designed to help good companies that are struggling with the current market conditions, so that they can continue to grow and expand once they have weathered the storm.

There are many companies at the moment that are struggling with the state of the markets and simply require a short cash injection so that they can keep ticking over. CZ has been clear that the industry recovery fund is “to help projects that are otherwise strong, but in a liquidity crisis.”

Binance thus far has $1 billion for their industry recovery fund, which will allow the company to acquire a range of different crypto assets at a significant discount when compared with if they had tried to pay the same assets at the top of the market.

Given that the $1 billion they currently have is in BUSD, this also presents an opportunity for Binance to dramatically increase the size of their stable coin offering .

Can the recovery fund save crypto?

The industry recovery fund certainly ought not be treated as a panacea for the bear market, but for many otherwise-profitable companies that are currently experiencing problems with liquidity, it could be a Godsend.

For Binance, it allows them to further paint themselves as the white knights of crypto (a position that until very recently was occupied by SBF), and helps to further cement their reputation as a reliable and strong company. Moreover, it allows them to completely dominate the space by buying up a range of different companies relatively cheaply.

As of now, it isn’t entirely clear who is in the running to have some of the fund allocated to them, but time ought to tell soon.

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