Binance to commit $1 bln for crypto recovery initiative

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Nov 24 (Reuters) — Cryp­tocur­ren­cy exchange Binance said on Thurs­day it was com­mit­ting $1 bil­lion to estab­lish­ing an indus­try recov­ery ini­tia­tive (IRI) to invest in com­pa­nies from the dig­i­tal assets sector.

The move comes at a time when the cryp­to mar­ket is tee­ter­ing from the col­lapse of FTX, which is seek­ing Chap­ter 11 bank­rupt­cy pro­tec­tion in the Unit­ed States.

The unrav­el­ing of one of the biggest cryp­to exchanges in the world has also fanned wor­ries around the indus­try’s con­tin­ued abil­i­ty to draw invest­ments from ven­ture cap­i­tal and pri­vate equi­ty giants.

Binance said it intends to ramp up its com­mit­ment amount to $2 bil­lion in the near future depend­ing on need.

“We antic­i­pate this ini­tia­tive will last about six months and will be flex­i­ble on the invest­ment struc­ture — token, fiat, equi­ty, con­vert­ible instru­ments, debt, cred­it lines, etc,” the cryp­to exchange added in a statement.

Zhao said while speak­ing at a con­fer­ence in Abu Dhabi last week that there was sig­nif­i­cant inter­est from indus­try play­ers in a recov­ery fund his com­pa­ny plans to launch to help cryp­tocur­ren­cy projects fac­ing a liq­uid­i­ty squeeze, fol­low­ing the col­lapse of rival FTX.

He said such a fund would help “reduce fur­ther cas­cad­ing neg­a­tive effects of FTX” with­out giv­ing an exact fig­ure for the fund.

Sev­er­al cryp­to firms have been brac­ing for the fall­out from the FTX col­lapse, with many count­ing their expo­sure in mil­lions to the belea­guered exchange.

Report­ing by Akank­sha Khushi and Manya Sai­ni in Ben­galu­ru; Edit­ing by Anil D’Sil­va and San­dra Maler

Our Stan­dards: The Thom­son Reuters Trust Principles.

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