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Binance Confident to Raise $2 Billion for Its Crypto Recovery Fund

Binance Confident to Raise $2 Billion for Its Crypto Recovery Fund

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Ever since the collapse of the cryptocurrency exchange FTX, Binance CEO Changpeng Zhao has been actively working to establish a recovery fund to help distressed but fundamentally strong companies. In addition, Binance has also doubled its fundraising plan from $1 billion to $2 billion now.

In an interview on Thursday, November 24, Zhao said that the crypto recovery fund has co-investors to support crypto projects that face liquidity shortages. “We have a loose approach where different players in the industry participate as they see fit,” he said.

Some of the popular names like Polygon Ventures, Jump Crypto, Animoca Brands, Aptos Labs, Kronos, GSR and Brooker Group have already made a collective pledge of $50 million. The head of Binance said that he is working to limit the damage caused by the collapse of FTX to the crypto sector.

Binance has yet to confirm how much it is willing to put up. But the sources said that Binance’s future contribution is much larger than the commitments made by other companies. David Adams, portfolio manager of the King River Digital Assets Fund told Bloomberg:

“The market will be watching the fund’s public wallet address closely to see if it attracts a significant amount of non-Binance capital, as this shows how widespread industry support is for stabilization”.

Zhao’s credibility at stake with crypto recovery fund

While the head of Binance is taking the opportunity to build his credibility in the crypto space, the fact that his tweet triggered the turn of events at FTX has raised a few questions. Some lawmakers in the UK Parliament have also asked Binance to explain the circumstances surrounding Zhao’s tweets on November 6.

Lawmakers want to know whether the company understood the impact of those tweets. Hayden Hughes, CEO of social commerce platform Alpha Impact, said:

“There is too much uncertainty in the market for the stimulus fund itself to be the catalyst that turns everything upside down. We still don’t know the extent of the infection. But I think we’re at or near the bottom and I don’t expect the market to go down much from here.

On the other hand, regulatory tensions with Binance continue as the exchange holds licenses in multiple jurisdictions with no formal basis anywhere.

Bhushan is a FinTech enthusiast and has a good knack for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain Technology and Cryptocurrency. He is constantly in the learning process and keeps himself motivated by sharing the knowledge he has acquired. In her free time, she reads thriller fiction and sometimes explores her culinary skills.

The presented content may contain the author’s personal opinion and is subject to the market situation. Do market research before investing in cryptocurrencies. Neither the author nor the publication is responsible for your personal financial loss.

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