Binance has committed $1 billion to a crypto industry recovery initiative to restore trust after the collapse of crypto exchange FTX. Several other crypto companies have joined Binance’s efforts and have committed capital to the recovery fund.
Crypto-currency industry recovery initiative launched.
Crypto-currency exchange Binance on Thursday unveiled some details of its Industry Recovery Initiative (IRI), which the crypto-currency company describes as “a new co-investment opportunity for organizations interested in supporting the future of the web3.“
The ad 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 initial aggregate commitment of approximately $50 million, and we expect more participants to join soon “, Binance added. Each participant has set aside the committed capital in stablecoins or other tokens.
Binance explained that it will look for projects characterized by “innovation and long-term value creation“, “a clearly delineated and viable business model” and “a laser focus on risk management.”
The global crypto-currency 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 was setting up a crypto-currency industry recovery fund last week. The executive explained at the time that the goal of the recovery fund is to “Further reduce the cascading negative effects of FTX“by assisting projects that “are otherwise sound, but in liquidity crisis.” CZ compared the FTX fiasco to the 2008 financial crisis, warning that “cascading effects“.
FTX filed for Chapter 11 bankruptcy protection on Nov. 11 and former CEO Sam Bankman-Fried stepped down. The company is under investigation in several jurisdictions. In the U.S., a number of authorities are investigating the exchange for mismanagement of client funds.
Binance explained that IRI is not an investment fund. “We have already received about 150 applications from companies seeking support through the IRI“, noted the exchange, noting:
The mandate of this new effort is to support the most promising and highest quality companies and projects built by the best technologists and entrepreneurs who, through no fault of their own, are facing significant short-term financial difficulties.
The announcement further states 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 will require tailored solutions.“