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(Changed supply, redesigned to lead with Binance statement)

Nov 24 (Reuters) – Cryptocurrency exchange Binance said on Thursday it was committing $1 billion to set up an industry recovery initiative (IRI) to invest in companies in the sector digital assets.

The move comes at a time when the crypto market is teetering after the collapse of FTX, which is seeking Chapter 11 bankruptcy protection in the United States.

The takedown of one of the world’s largest crypto exchanges has also stoked concerns about the industry’s continued ability to attract investment from venture capital and private equity giants.

Binance said it intends to increase its commitment amount to $2 billion in the near future based on need.

“We expect this initiative to last around six months and be flexible on the investment structure – token, fiat, stocks, convertible instruments, debt, lines of credit, etc.,” the crypto exchange added in a statement.

Zhao told a conference in Abu Dhabi last week that there was significant interest from industry players for a stimulus fund his company plans to launch to help cryptocurrency projects. facing a cash crunch, following the collapse of rival FTX.

He said such a fund would help “further reduce the cascading negative effects of FTX” without giving an exact figure for the fund.

Several crypto firms braced for the fallout from FTX’s collapse, with many counting their exposure in the millions to the beleaguered exchange. (Reporting by Akanksha Khushi and Manya Saini in Bengaluru; Editing by Anil D’Silva and Sandra Maler)

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