Binance has committed $1 billion to a crypto industry stimulus initiative to restore confidence after the collapse of crypto exchange FTX. Several other crypto companies have joined Binance’s efforts and committed capital for the recovery fund.
Crypto Industry Recovery Initiative Launched
Cryptocurrency exchange Binance unveiled some details of its Industry Recovery Initiative (IRI) on Thursday, which the crypto company described as “a new co-investment opportunity for organizations willing to support the future of the web3”.
The announcement states:
Initially, Binance will commit $1 billion to IRI-themed investment opportunities with the intention of increasing that amount to $2 billion in the near future if the need arises.
“So far, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have also committed to participate with an aggregate initial commitment of approximately $50 million, and we expect more participants are joining soon,” Binance added. Each participant has set aside committed capital in stablecoins or other tokens.
Binance explained that it would look for projects characterized by “long-term innovation and value creation”, “a clearly defined and viable business model”, and “a laser focus on risk management”.
The global crypto exchange noted:
What makes this initiative unique is the collaborative approach to restoring trust in web3.
Binance CEO Changpeng Zhao (CZ) first revealed that his company is setting up a crypto industry recovery fund last week. The executive Explain at a time when the goal of the stimulus fund is “to further reduce the negative cascading effects of FTX” by helping projects that “are otherwise strong, but in liquidity crisis.” CZ compared the FTX fiasco to the 2008 financial crisis, warning that “cascading effects.”
FTX filed for Chapter 11 bankruptcy on November 11 and former CEO Sam Bankman-Fried stepped down. The company is under investigation in multiple jurisdictions. In the United States, a number of authorities are investigating exchange for mismanagement of client funds.
Binance explained that IRI is not an investment fund. “We have already received around 150 applications from companies seeking support under the IRI,” the exchange noted, adding:
The mandate of this new effort is to support the most promising, highest quality businesses and projects built by the best technologists and entrepreneurs who, through no fault of their own, face significant short-term financial difficulties.
The announcement further clarifies that the initiative is expected to last approximately six months and “will be flexible on the investment structure – token, fiat, equity, convertible instruments, debt, lines of credit, etc. – as we expect that individual situations require tailor-made solutions.”
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