Binance CEO Changpeng Zhao said the exchange will launch a crypto recovery fund to reduce the impact of the FTX collapse. Simon Dixon and Justin Sun, two other industry leaders, endorsed the effort.
The most recent tweets from the CEO of the biggest exchange in the world, Binance, caused a dramatic rise in the price of the main cryptocurrency as well as the whole cryptocurrency market.
Changpeng Zhao, the CEO of Binance, announced that Binance will create a recovery fund to calm the cryptocurrency market. According to Zhao, the major goal of the fund would be “to reduce further cascading negative effects of FTX.” According to the CEO of Binance last week, the exchange’s deep integration within the sector ensured that its collapse would spread widely.
He continued by saying that the money will help initiatives that were normally financially viable but were adversely affected by these consequences. There is no information available on the initiatives the fund will be funding, but one thing is certain: CZ has no plans to support FTX.
This had a very positive impact on the entire market, as Bitcoin’s price skyrocketed to almost $17,000.
Huobi and Poloniex Support Binance’s Recovery Fund Initiative
The CEO of Binance also urged other members of the sector committed to its survival and revival to make a contribution. This instantly piqued the interest of well-known figures in the crypto business, like Justin Sun and Simon Dixon.
Justin Sun who just joined Huobi’s advisory board tweeted support for the recovery fund initiative by Binance. Dixon endorsed it but cautioned against it becoming unduly centralized.
After a week of dramatic events, Sam Bankman-FTX Fried’s filed for Chapter 11 bankruptcy on Friday. During that time, the exchange faced a liquidity crisis and finally had to halt withdrawals as traders hurried to remove their money off the trading platform. Additionally declaring bankruptcy will be the company’s sister company Alameda Research, its American affiliate FTX.US, and over 130 other related firms.
Given FTX’s high profile, which included signing contracts with athletes like Tom Brady and spending $135 million to rename the Miami Heat stadium, there are concerns that the company’s demise may have a domino effect on the whole sector, leading other large corporations to choose the same course.