- Binance plans to launch a recovery plan after the FTX incident
- The CEO said the recovery fund would reduce further cascading negative effects of FTX
- He further reiterated the need to have proper and stable industry regulations
Binance joins the likes of Tron Lab and Chiliz to announce a recovery plan for crypto projects in crisis. The recovery plan will also cover affected customers.
This announcement came shortly after its rival, FTX, filed for bankruptcy and was attacked.
Binance Announces An Industry Recovery Plan
On the 14th of November, the CEO of Binance, Changpeng Zhao, announced the recovery plan of Binance. He said Binance is forming a bailout initiative for projects that are “otherwise strong.”
Furthermore, he said the initiative would be an Industry Recovery Fund to cushion the effect of the FTX crash. Changpeng Zhao’s statement reads, “ the initiative would be an Industry Recovery Fund to remediate the negative effects of FTX.”
Similarly, “Binance is forming an industry recovery fund to help projects which are otherwise strong but in a liquidity crisis.” However, there are few details about the recovery funds and plans. When contacted, Changpeng Zhao said, “more details to come soon.”
In what seems to be a generous gesture, Binance calls for more crypto projects to enroll in the recovery plan. The CEO said, “Projects in the category the Binance CEO mentioned and are qualified should contact Binance Labs.
Furthermore, Binance seeks partnerships with industry players to support the recovery plan. Industry players who would like to help cushion the effect and keep these projects running— can co-invest in the Binance industry recovery fund project.
Changpeng Zhao had earlier tweeted the need to unify Celsius Network, FTX, Invest voyager, and BlockFi creditors.
We need to unify. @CelsiusNetwork Creditors, @investvoyager Creditors, @FTX_Official Creditors, @BlockFi Creditors – RT & Follow. Industry Creditor Recovery Plan Coming. 🚀 pic.twitter.com/5BSwuHfFJV
— Simon Dixon (@SimonDixonTwitt) November 12, 2022
He added that Binance would liquidate its FTT holdings, FTX native token.
Similarly, Zhao addressed a gathering of G20 leaders at a summit in Bali, where he emphasized industry regulation. He said, “We do need some regulations; we do need to do this properly and in a stable way.”
Furthermore, he identified the collective roles expected of the industry. He said I think the industry collectively has a role in protecting consumers, in protecting everybody.
Changpeng Zhao, in his closing remarks, said,
“Crypto is not going away. We are still here. Let’s rebuild.”
The effect of the FTX crash can not be overemphasized– at a time when the crypto winter is at its peak. Industry players are optimistic that the Binance recovery plan will help mitigate the effect on investors.
The exchange has reiterated the need for co-investor to join the recovery plan and come to FTX aid. Conclusively, investors are anxious about the details of the recovery plan.