Binance has released new information about its industry recovery fund, which intends to assist suffering players in the aftermath of FTX's disastrous bankruptcy.
Binance is attempting to keep the crypto sector going following the collapse of controversial entrepreneur Sam Bankman-Fried's exchange FTX earlier this month.
Binance stated in a blog post that it will provide $1 billion to the recovery fund as an initial pledge. It may expand that sum to $2 billion in the future "if the need arises," according to the company.
It has also garnered commitments of $50 million from crypto-native investment firms like Animoca Brands, Jump Crypto, and Polygon Ventures.
Changpeng "CZ" Zhao, the CEO of Binance, revealed the public wallet address showing the company's initial commitment, which showed a balance of about $1 billion in Binance's own BUSD stablecoin.
"We do this transparently," he said.
According to the website of blockchain infrastructure provider Paxos, BUSD is a stablecoin that has been certified and governed by the New York State Department of Financial Services.
Part of FTX's demise was precipitated by a tweet from Zhao that called attention to a CoinDesk article casting doubt on its bookkeeping. Investors have been concerned about a potential crypto pandemic infecting every aspect of the sector since FTX's abrupt winddown two weeks ago.
A lawyer for the company offered a harsh verdict of FTX and its leadership during the first court hearing for the bankruptcy case on Tuesday, claiming that the company was operated as the "personal fiefdom" of Bankman-Fried.
Zhao is starting to fill the void left by Bankman-Fried, whose firm had purchased or invested in a number of troubled crypto startups before its collapse.
According to Binance, the vehicle "is not an investment fund" and is intended to assist enterprises and initiatives experiencing substantial financial challenges.
Zhao has previously stated that he intends to prevent further "cascading contagion effects" from FTX's bankruptcy.
Binance believes that the program will last six months. It is inviting applications from investors who want to make additional contributions.
Binance stated that it is "flexible on the investment structure" and accepts tokens, cash, and debt donations.
According to Binance, over 150 startups have already filed for funding from the fund.
The announcement had little impact on cryptocurrency prices. Bitcoin was up roughly 0.2% in the last hour, while ether was trading flat for the period.
As Americans enjoy the Thanksgiving holiday, trading volumes in the U.S. are expected to be sluggish.
