Updated on January 10, 2023 2:20 PM
Binance, a cryptocurrency exchange, announced that it would devote $1 billion to creating an industry recovery initiative (IRI) to fund businesses in the digital assets industry.
The action is being taken while FTX, which is looking for Chapter 11 bankruptcy protection in the United States, collapses, and the cryptocurrency market is on edge.
"The industry needs to be saved now, and we should not wait for 2023," he said.
The fund might increase to up to $2 billion, according to a blog post describing the launch, "if the need arises."
Before possibly adding additional money, the team will first gauge how far the $1 billion goes, according to CZ. The public address for these monies was also mentioned in the message.
"We're planning to set aside roughly $1 billion initially, and if that isn't enough, we'll dedicate more. We can withdraw the money back if there are any unused funds after six months and there aren't many projects—hopefully, by then, the industry will have recovered."
On November 14, the exchange executive announced the establishment of an "industry recovery fund" to support businesses that "are otherwise healthy but in a liquidity issue" due to the FTX repercussions.
At that time, both Justin Sun, the creator of Tron, and Simon Dixon, the CEO of BankToTheFuture, declared that they, too, would contribute to the fund. However, it needs to be made apparent if they have contributed.
These names still need to make contributions to the fund. Jump Crypto, Polygon Ventures, and Aptos Labs were a few of the projects that contributed a total of almost $50 million, according to Binance.
In the Bloomberg interview, CZ also acknowledged that the fund would be interested in some of the troubled cryptocurrency projects that the now-defunct exchange FTX had acquired, but he did not specify which ones.
"We should surely look at those assets," he added. "They invested in a variety of initiatives, some of which are good and others awful, but I believe that several assets might be salvageable. As soon as they are available, we'll review that."
In the wake of Terra's failure and the resulting suffering for the cryptocurrency sector, Sam Bankman Fried's business, including FTX and hedge fund Alameda Research, went on an acquisition and bailout spree earlier this year.
As recently as September, SBF asserted that FTX had $1 billion set aside for additional buyouts. There were even speculations that he was considering buying the publicly traded trading software Robinhood at one time.
Even though the CEO of Binance had inadvertently criticized FTX's strategies in a blog post from June, CZ now fills the position of industry rescuer due to SBF's fall from grace.
"Don't keep supporting poor businesses," he advised. "Let them struggle."