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.”
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.
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.”