On Thursday (Nov. 25), Binance, the world’s largest cryptocurrency exchange, announced new details about its Industry Recovery Initiative (IRI) fund, which is meant to help cash-strapped companies in the aftermath of FTX’s shocking implosion earlier this month.
In a blogpost, Binance said it will allocate $1 billion in initial commitments to its recovery fund with an intent to double that amount to $2 billion in the future “if the need arises.”
Binance also said that it has received $50 million in commitments from Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos and Brooker Group and that it expects more participants to join soon.
To ensure transparency, crypto mogul and Binance CEO Changpeng “CZ” Zhao shared the public wallet address showing the exchange’s initial commitment. According to CNBC’s review of public blockchain data, Binance’s own BUSD stablecoin is worth around $1 billion.
Zhao has FTX’s Bankman-Fried to thank for his new figurehead status in the ailing industry, as the latter’s firm bought or invested in numerous struggling crypto companies before its own collapse.
It should be noted that Zhao’s involvement in FTX’s downfall raises concerns about his new role as an industry savior since he was partially responsible for its collapse. Initially, Binance agreed to purchase FTX while it was imploding. However, after Zhao realized how unstable Bankman-Fried’s exchange was, he backed out of the deal.
Meanwhile, on Tuesday, during the first court hearing for the bankruptcy case against FTX, one of the company’s lawyers gave a damaging verdict of FTX and its leadership. The lawyer said that Bankman-Fried ran the show as his “personal fiefdom.”
Binance clarified that the vehicle is “not an investment fund,” but instead a way to support companies that “through no fault of their own” are experiencing “significant, short term financial difficulties.” Zhao has commented that his intention is to prevent any more “cascading contagion effects” from happening in light of FTX’s bankruptcy.
Binance stated that they expect the program to last for about six months. They are currently accepting applications from investors who want to contribute to the IRI fund. The crypto exchange also said that they are “flexible on the investment structure” and will accept contributions in tokens, cash, or debt. The company added that they “expect individual situations to require tailored solutions.”
Around 150 applications from companies seeking support from the fund have already applied, Binance said.
The news didn’t have much of an effect on the crypto market. Bitcoin (BTC) and Ethereum (ETH) were trading mostly flat throughout the session.
Low trading volumes are expected in the US as Americans celebrate Thanksgiving.
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