Binance to create industry recovery fund after FTX collapse: CEO

Binance to create industry recovery fund after FTX collapse: CEO

Cryptocurrency exchange Binance is calling on other industry players to join it in creating a recovery fund to help prevent liquidity-strapped companies from collapsing.

Binance CEO Changpeng Zhao issued the call on his Twitter page after cryptocurrency exchange FTX filed for bankruptcy on Friday as customers withdrew assets.

Zhao insisted that cryptocurrencies are “not going away” as he urged more backers to pour money into the fund.

“To reduce further cascading negative effects of FTX, Binance is creating an industry recovery fund to help projects that are otherwise strong but in a liquidity crisis. More details coming soon. In the meantime, please contact Binance Labs if you think you qualify,” Zhao wrote.

“Also welcome other cash-strapped industry players who want to co-invest. Crypto is not going away. We are still here. Let’s go again,” he added.

During a session at the B20 conference in Bali, Indonesia, Zhao said the crypto industry needs a regulatory framework to make the sector more resilient and therefore more viable.

“The crypto industry should increase transparency and sophistication. We need some regulations in the crypto industry. But we should do it properly and steadily,” Zhao said.

He added: “We need to work very closely with regulators around the world to make the industry more robust.”

Zhao, popularly known as CZ, also argued that the onus must be on companies as much as regulators to ensure best practices are followed.

“Together, the crypto industry plays a role in protecting consumers. So it’s not just the regulators. Regulators have a role, but it is not 100% their responsibility. No one can protect a bad player. We should set strict standards for the industry,” he added.

During the lecture, Zhao said that blockchain technology is changing the business environment around the world as it helps entrepreneurs generate funds quickly.

“Blockchain provides a very useful tool for entrepreneurs to raise money. Today, any entrepreneur with a decent background can get 10-20 million dollars in a few days. It will take years to do the same with traditional VCs,” he said.

He also added that Indonesia’s tax regime for cryptocurrencies is suboptimal and licenses should be more easily available in the country.

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