leader Binance has a plan to save the industry

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Binance, the #1 cryptocurrency exchange, has a plan to save the industry from the FTX debacle. In particular, the exchange announced the creation of an emergency fund to help cash-strapped players.



The FTX debacle sent a wave of panic through the cryptocurrency industry. Many players rely on funding from the stock exchange or from a Sam Bankman-Fried company. This is especially the case for the Solana blockchain and its SOL token.

In addition, it has an abundance of mutual funds and asset managers deposited cryptos on the platform, for example to carry out trading activities or to benefit from high returns. After the bankruptcy, these assets disappeared, leaving certain firms bloodless. Companies like the Ikigai fund or trading firm Genesis Trading have lost significant amounts.

Also Read: Historic Cryptocurrency Crash – All Info Live
Binance announces emergency fund


Against this background, Changpeng expects Zhao, CEO and founder of Binance other ecosystem players are collapsing in the near future. The Chinese billionaire claims it’s mainly the entities’ close to the FTX ecosystem who find themselves in a complicated financial situation. According to him, it will take a few weeks for most of them to recover”. To avoid carnage, the Binance boss announced the creation of an emergency fund to support struggling players:

To mitigate further cascading negative effects from FTX, Binance is forming an industry recovery fund to help projects that are otherwise strong but are in liquidity crunch. More details will follow soon. In the meantime, please contact Binance Labs if you think you qualify. 1/2

— CZ
🔶
Binance (@cz_binance) November 14, 2022
“To further mitigate the negative cascading effects of FTX, Binance is creating an industry recovery fund to help projects that are otherwise strong but are in a cash crunch”says Changpeng Zhao, who bills Binance as the savior of the industry.
It is clear that players in the crypto ecosystem who have no money can claim help from this initiative. In theory, the emergency measure could prevent other entities from going bankrupt. However, to take advantage of this, they will have to prove that their fundamentals are solid. Unsurprisingly, Binance has no intention of financially supporting projects whose foundations are uncertain. In response to a tweet, Zhao also indicates that ” liars or fraudsters are never considered solid projects”.

To ask for help, actors affected by the fall of FTX are invited to get in touch Binance labs, the group’s investment fund. At this point, we don’t know which companies could benefit from this outburst of generosity. The founder of Binance promised to provide more details in the near future. Finally, Changpeng encourages Zhao ” other industrial players with cash » invest in the recovery plan.

A few days earlier, Binance also upgraded own internal emergency fund, intended to protect against the vagaries of the markets. The company added $1 billion to the fund. User Safe Asset Fund (SAFU) », made in 2018, for “Protecting Binance Users in Extreme Situations”.

“We promised our user base, as well as the wider crypto ecosystem, that SAFU would always maintain a significant level of funds. We will continue to keep that promise. […]. When users deposit their money on the Binance platform to use our products, they can rest assured that we are fiscally responsible for that money. Binance is and has never acted as an investment company or hedge fund.”describes a press release from Binance.
Improve platform transparency


At the same time, Changpeng Zhao is actively campaigning for improving transparency trading platforms. To reassure investors, Binance also has a Reserve evidence. This is a list of blockchain addresses that hold the company’s reserves. We learn, simply by consulting the blockchain, that Binance has more than $71 billion despite the cryptocurrency crash. The number 1 stock exchange in the world was quickly imitated by the competition. Crypto.com and Kraken also published their own analyzes of available reserves.

For the number 1 in the world in cryptos, this type of analysis is not yet sufficient. The exchange says it is working with Vitalik Buterin, the co-founder of Ethereum, on a new protocol for Merkle tree type Proof of Reserve. In cryptography, it is a way of structuring data that can hold a large amount of information. This process should make it possible to check the solvency of a platform at a glance on the blockchain, without the intervention of an external auditor. The new analysis should be available in the coming weeks.

Our goal is to empower users of our platform to be informed and make informed decisions in line with their financial goals. explains Binance in a blog post.
With these multiple initiatives, Binance is taking advantage of the death of FTX to polish its image as the white knight of cryptocurrency. The exchange shows the strength of its business, which should convince many customers to deposit money on the platform. Changpeng Zhao, a great strategist, has turned the historic crypto crisis into massive publicity for his services.

Better regulation for crypto


The Chinese-Canadian entrepreneur also believes that abetter regulation of the sector is needed. On the sidelines of the G20 summit in Bali, Zhao pleaded for regulators to examine the ecosystem:

“We are a new sector, and we saw it last week, the situation is getting crazy in this sector. We really need regulation, it has to be done correctly, it has to be done in a stable way.”
While Europe has already developed a clear legal framework for cryptocurrencies, the rest of the world is still lagging behind in this area. This is particularly the case in the United States, which is focusing on the design of a digital dollar.
 
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