As the collapse of rival FTX echoes across the market, Binance Chief Executive Changpeng Zhao announced that the cryptocurrency exchange plans to launch a fund to aid crypto projects facing a liquidity crisis.
Zhao said in a tweet on Monday that the recovery fund will help “reduce further cascading negative effects of FTX,” targeting projects that are “otherwise strong, but in a liquidity crisis.”
“SpaceX Starlink bought a tiny – not large – ad package to test effectiveness of Twitter advertising in Australia & Spain. Did same for FB/Insta/Google,” Musk tweeted on Monday.
A request for comment about the magnitude of the planned fund was not immediately responded by Binance, which abandoned an originally proposed rescue of FTX.
The collapse of rival exchange Sam Bankman-FTX, Fried’s which declared bankruptcy on Friday after consumers rushed to withdraw $6 billion in cryptocurrency tokens in only 72 hours, has shocked the crypto community.
Investors expressed anxiety over FTX’s balance sheet when Zhao said in a tweet on November 6 that Binance will sell its holdings in FTT, FTX’s native token. On November 8, Binance announced that it was thinking about a rescue offer for FTX, which was eventually abandoned following due diligence.
Earlier on Monday, Zhao called for new but stable and clear regulations for the industry, in light of recent developments and participants “cutting corners”.
“We’re in a new industry, we’ve seen in the past week, things go crazy in the industry,” Zhao told a gathering of G20 leaders at a summit in Bali. “We do need some regulations, we do need to do this properly, we do need to do this in a stable way.”
“I think the industry collectively has a role to protect consumers, to protect everybody. So it’s not just regulators. Regulators have a role but it’s not 100% their responsibility,” Zhao said.
In a tweet posted over the weekend, Zhao asked other exchanges to follow Binance’s lead and stop accepting deposits of FTX’s FTT token on their platforms.
On Monday, Zhao also said in a tweet that Binance “never shorted FTT.”
“We still have a bag of (FTT) as we stopped selling FTT after SBF (Sam Bankman-Fried) called me. Very expensive call,” he added.