- Binance will allocate $2 billion in an industry recovery initiative.
- More projects have joined, including Aptos Labs and Jump Crypto.
Binance will invest a total of $2 billion in the Industry Recovery Initiative, which aims to mitigate contagion from the collapse of rival exchange FTX.
“Yesterday, Binance allocated another $1 billion for the Industry Recovery Initiative,” Binance CEO Changpeng Zhao wrote in a tweet today.
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#Binance SAFU Insurance Fund (equal to 1 billion USD) is roughly divided between BTC, BUSD and BNB. BNB price has increased faster than BTC since the last rebalancing. Yesterday, #Binance committed another $1 billion to an industry recovery initiative, both of which are public on the blockchain. https://t.co/Dpu9tNx5NQ
– CZ Binance (@cz_binance) November 25, 2022
On Tuesday, Binance announced that Aptos Labs and crypto trading firm Jump Crypto will be joining the initiative. Other players contributing to the fund are venture capital funds Polygon Ventures and Animoca Brands, as well as GSR, Kronos, and Brooker Group.
Binance also released more details about the initiative on its blog. They noted that the Industry Recovery Initiative is not an investment fund but a way for industry leaders to invest transparently in distressed projects.
Participants will allocate funds and transfer them to public wallets. Each participant will make investment decisions independently, on a deal-by-deal basis.
They expect the initiative to last about six months. After that, any participant who has not used part of his funds can withdraw them from the public address.
The Binance SAFU Fund is backed by 44% of the BNB token
Earlier, Binance received criticism for holding 44% of the SAFU fund in BNB tokens.
The Safe Asset User Fund (SAFU) is an emergency insurance fund created to protect the funds of Binance users. However, some have argued that it should not be held in BNB coins, which could lead to losses if the value of the token falls.
“How would we feel about FTX owning an insurance fund full of FTT,” one critic wrote on Twitter. Binance CEO Changpeng Zhao responded by saying that the assets in the SAFU fund were roughly split between BTC, BUSD, and BNB. The discrepancy came about because the price of BNB has risen faster than the price of Bitcoin since the last rebalance, CZ wrote.
All tokens in the Binance Industry Recovery Initiative wallet are in the BUSD stablecoin.
on the flip side
- Binance may face antitrust scrutiny for buying ailing projects.
Why should you bother
The collapse of FTX continues to have a significant impact on the industry, with many projects still reeling from its fallout. Binance’s $2 billion fund could provide a respite to the markets.
Read about Binance’s first offering after the FTX crash
Binance resumes bidding for Lender Voyager bankruptcy after FTX collapse
Read more about the Binance Coin Relief Fund
Binance CEO Pledges $1 Billion in Crypto Relief, Suggests FTX Spread Rumors Against Competitor