Binance commits another $1 billion to crypto industry recovery fund following FTX’s collapse - YAHOO FINANCE
Yahoo Finance crypto reporter David Hollerith outlines Binance's commitment of another $1 billion to aid crypto industry recovery.
AKIKO FUJITA: Turning now to crypto. Crypto exchange Binance announcing it is launching a billion dollars industry recovery fund to restore investor confidence, following the FTX collapse. This, as FTX founder Sam Bankman-Fried is set to speak at the "New York Times" DealBook summit on Wednesday.
Let's bring in Yahoo! Finance's Crypto Reporter David Hollerith. David, I'm kind of getting flashbacks to the summer when Sam Bankman-Fried was trying to rescue a lot of other crypto assets. But what do we know about this recovery fund? It sounds like CZ's willing to go beyond a billion now.
DAVID HOLLERITH: Right, Akiko, yeah, you can't help but think of the summer where FTX tried a similar thing. And obviously, all those moves for bailouts were being interpreted quite differently, given that FTX has collapsed and is in bankruptcy now.
But Binance's effort is a little bit different. And I think the key things we would point out is, one, that up to this point, the firm has deployed about $1 billion to the fund. And the fund is essentially a crypto wallet that they're setting aside. So in some ways, that is more proof that the fund is not connected to any of Binance's other assets and businesses, which is good to know, given the unfolding developments with FTX.
But Binance is also hoping to have a number of other industry investors come in. And those have include firms like Polygon Ventures, GSR the trading firm, and others. And really, this is sort of a last ditch effort. It's seen to be to help distressed firms.
But this is looking more like a distressed investing opportunity. With a little bit more transparency in terms of the criteria that Binance is looking at, one of those points is that they're looking for companies with a clear business model and very good risk mitigation protocols. Added to that, they've already sort of shown that they're not taking in all distressed firms.
Genesis Trading, the major lending firm that has been facing troubles for the past two weeks, it's been reported by "The Wall Street Journal," that Binance actually walked away from a deal with them, citing a conflict of interest concerns.
Now, so already we're seeing a little bit more transparency in terms of what Binance is hoping to do, compared to what was-- it turned out to be a much more opaque version of bailouts this summer from FTX.
RACHELLE AKUFFO: Well, certainly, those calls for transparency getting louder in light of that collapse. A big thank you there to Dave Hollerith. Have a great weekend.