Binance CEO Vows to Start Crypto Rescue Fund

With his industry still reeling from the collapse of cryptocurrency exchange FTX, the CEO of Binance is pledging to set up a crypto recovery fund.

Writing on Twitter Monday (Nov. 14), Changpeng Zhao said the purpose of the fund is “to help projects who are otherwise strong but in a liquidity crisis.”

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. 1/2

— CZ 🔶 Binance (@cz_binance) November 14, 2022

He said more details about the fund are forthcoming and invited businesses that think they qualify — and investors who want to contribute — to get in touch.

“Crypto is not going away,” Zhao wrote. “We are still here. Let’s rebuild.”

That rebuilding follows last week’s implosion of one of Binance’s rivals, FTX, which sought bankruptcy protection after customers scrambled to withdraw $6 billion in crypto tokens in just 72 hours.

On Nov. 6, Zhao tweeted that his company would liquidate its FTT holdings — FTX’s token — leading to concerns from investors about FTX’s health.

Zhao and FTX founder Sam Bankman-Fried had initially come to an agreement that would have seen Binance acquire its smaller competitor, but Binance backed away from the deal following two days of due diligence.

Since then, the fallout has grown and grown, with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) getting involved, and Bankman-Fried reportedly facing a criminal investigation in the Bahamas, where FTX is headquartered.

And as PYMNTS’ Karen Webster wrote Monday, all of this raises some obvious questions, such as: How is it that when every other crypto exchange was seeing its value shrink this summer, FTX had the cash to bail other companies out?

“What we know now is that it wasn’t,” Webster wrote. The company’s bankruptcy filing – showing $900 million in liquid assets against $14 billion in liabilities “suggests that not all was champagne and roses in FTT token land.”

Crypto experts have speculated that FTX’s “bailout” of Voyager and BlockFi in July was designed to prevent a run on FTT tokens and a liquidity crisis during the summer. That, Webster wrote, makes it clear the former CEO had some idea — or at least should have known — the crisis facing his company.

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