Binance has pledged $1 billion to a crypto industry recovery initiative to restore confidence following the collapse of crypto exchange FTX. Several other crypto companies have joined Binance’s efforts and pledged capital for the recovery fund.
Crypto industry recovery initiative launched
Cryptocurrency exchange Binance on Thursday revealed some details of its Industry Recovery Initiative (IRI), which the crypto company described as “a new co-investment opportunity for organizations eager to support the future of web3.”
The announcement states:
Initially, Binance will commit $1 billion to IRI-themed investment opportunities, with the intention of increasing that amount to $2 billion in the near future if needed.
“To date, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos and Brooker Group have also committed to participate with an initial aggregate commitment of approximately $50 million, and we expect more participants to join soon. join,” said Binance. added. Each participant has committed capital set aside in stablecoins or other tokens.
Binance explained that it will look for projects characterized by “long-term innovation and value creation”, “a clearly defined and viable business model” and “a laser focus on risk management”.
The global crypto exchange noted:
What makes this initiative unique is the collaborative approach to restore trust in web3.
Binance CEO Changpeng Zhao (CZ) first revealed last week that his company is setting up a recovery fund for the crypto industry. The executive explained at the time that the goal of the recovery fund is “to mitigate further cascading negative effects from FTX” by helping projects that are “otherwise strong but in liquidity crunch.” CZ has compared the FTX fiasco to the 2008 financial crisis and warned of “cascading effects”.
FTX filed for Chapter 11 bankruptcy on November 11, and former CEO Sam Bankman-Fried stepped down. The company is under investigation in multiple jurisdictions. In the US, a number of authorities are investigating the exchange for mishandling customer funds.
Binance explained that the IRI is not an investment fund. “We have already received about 150 applications from companies seeking support under the IRI,” noted the exchange, which elaborated:
The mandate of this new effort is to support the most promising companies and the highest quality projects built by the best technologists and entrepreneurs who, through no fault of their own, are facing significant short-term financial difficulties.
The announcement further indicates that the initiative is expected to last approximately six months and will be “flexible in terms of investment structure – token, fiat, equity, convertibles, debt, lines of credit, etc. – as we expect individual situations to require tailored solutions. ”
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