Binance CEO Changpeng ‘CZ’ Zhao revealed on November 14th that the exchange will launch an industry recovery fund to support strong projects in the liquidity crisis.
To further reduce the cascading effects of FTX, Binance has established an Industry Recovery Fund to support otherwise strong but liquidity-stressed projects. Details to be announced soon. In the meantime, if you think you are eligible, please contact Binance Labs. 1/2
— CZ🔶 Binance (@cz_binance) November 14, 2022
CZ has issued a statement in light of the recent bear market liquidity crisis that has hit several cryptocurrency projects, putting some of them out of business.
According to CZ, the fund is also open to other industry players wishing to invest. He added that more information about the initiative will be provided soon.
CZ has asked projects it believes to be eligible for funding to contact Binance Labs.
In June, CZ said Binance would be happy to help industry players survive and thrive.
Binance pool too launch A $500 million loan facility to support the cryptocurrency mining industry.
Crypto Community Praises CZ Initiative
The cryptocurrency community has welcomed the CZ initiative and many have welcomed the idea as a welcome development.
Hey CZ, great idea. In fact, we already do this for the best teams in our ecosystem who have been unfairly affected. I am happy to participate in the recovery fund.
— Quantstamp (@Quantstamp) November 14, 2022
This is great because we know that many great projects have been influenced by FTX. It would be nice to be able to list all the approved ones as well.
— Sydney TheCMO.eth (@SydneyIfergan) November 14, 2022
Tron (TRX) founder Justin Sun said his two exchanges, Huobi Global and Poloniex, will join the initiative.Sun Said:
“(We are) joining this industry recovery fund to help great builders and developers bounce back from the crisis!”
Another key stakeholder backing the fund was Simon Dixon, founder of web3 investment firm Bnk to the Future. Dixon said he wants to join the fund, adding that it should be an industry-wide effort.
don’t do this.
If a business is struggling with liquidity, there is a reason.
Usually mismanagement and bad hiring.
Giving money to help those in need only prolongs their ability to harm them and cause more direct harm to our customers.
— NerdzRin (@NerdzRin) November 14, 2022
On the other hand, some expressed reservations about this idea, asking how Binance judges “strong projects”. Others also point out that the fund should not bail out projects facing liquidity crises.