Binance to spend $1 billion to prevent crypto’s downward spiral

Binance, one of the most prominent cryptocurrency exchanges, announced that it will invest $1 billion behind a recovery fund to prevent crypto’s downfall following the FTX’s crash. Changpeng Zhao “CZ”, Binance’s CEO, made the announcement this Thursday.

CZ made a public announcement and showed his bitcoin balance to prove the fact. He has around $1 billion worth of BUSD (Binance USD, the company’s own stablecoin) in his account.

Alongside Binance, other cryptocurrency investment firms like Animoca Brands, Polygon Ventures, and Jump Crypto have put in $50 million in efforts to revitalize the crypto industry from declining trust and crash contagions.

The firm has notified that it will initially deploy $1 billion in the recovery fund. However, if the need arises, Binance might increase that threshold to $2 billion.

The Binance logo

Binance’s attempt at recovering the crypto industry is no surprise. Earlier this month, billionaire crypto entrepreneur Sam Bankman-Fried’s empire came crashing down. Overnight, he went from being one of the most successful icons in the industry to a man filled with multiple mishaps and is currently being evicted.

This has led to a loss of trust in the industry. Several banks and investors have started pulling out of the industry as they fear other firms will meet the same fate sooner or later.

While it was earlier assumed that Wall Street Banks might step in to rescue the digital currency market, a recent report suggested otherwise. Amidst this tumultuous situation, Binance owner Zhao seems to be the savior the industry desperately needed.

Zhao’s intentions seem to be noble. The $1 billion Binance will be put behind saving the industry and will not be treated as an investment fund. The company does not intend to draw a profit from it. Instead, it is meant for companies that are, “through no fault of their own, facing significant, short term, financial difficulties.”

FTX’s rapid fall has left the industry scarred with multiple issues in every segment of the market. Lawyers have called the firm’s operating mode as the “personal fiefdom” of its owner, Sam Bankman-Fried.

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