Early Friday morning, Binance CEO Changpeng Zhao said that the company had allocated another $1 billion to its “relief fund” aimed at helping troubled businesses in the crypto industry.
Binance’s efforts have accelerated since the FTX crash earlier this month, which saw the company, once valued at $32 billion, file for bankruptcy protection and leave the crypto industry on ice.
Earlier this month, Binance pulled out of a proposed deal to buy FTX.
According to the company, the Binance Recovery Fund, now worth $2 billion, targets troubled opportunities in the industry and has already received 150 applications from companies seeking support.
With no backing or interest in bailouts from central banks, crypto firms have no choice but to turn to this fund, dubbed the Industry Recovery Initiative, or IRI, as the largest current source of bailouts for the crypto sector.
“Each investment opportunity will be considered on its merits by each IRI participant acting on its own behalf, including relevant legal assessments,” a Binance spokesperson told Yahoo Finance.
To date, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have also committed to participate in IRI, adding an initial $50 million combined commitment. Notably, Jump Crypto, Animoca Brands, and GSR disclosed the risks associated with FTX without providing financial loss data.
According to Conor Ryder, a research analyst at cryptanalytic firm Kaiko, the fact that Binance is taking on the role of one of the last remaining cryptocurrency lifelines is a good sign.
While the initiative shares some of the hallmarks of FTX taking on a similar role over the summer, Ryder told Yahoo Finance that this latest effort has several key differences.
According to Ryder, the fund is linked to a public wallet address, which means “no more opaque relationships between exchanges and their investments.”
Earlier this week, the Wall Street Journal reported that Binance, along with Apollo, was approached by crypto broker Genesis Trading seeking emergency funding as its lending business suspended withdrawals on Nov. 16.
Binance said it withdrew the offer because some of Genesis’ business lines could potentially create a conflict of interest with its own. As of this morning, Binance told Yahoo Finance that the position has not changed.
“It was reassuring to see Binance reject the offer,” Ryder added. “In hindsight, FTX seemed to specialize in conflict of interest, so not wanting to get into an ambiguous relationship is reassuring.”
On Tuesday, FTX legal counsel in court called the crash earlier this month “the most dramatic and severe crash in the history of corporate America.”
The lawsuits showed that FTX owed a total of $3.1 billion to its top 50 creditors.
David Hollerith is a senior reporter for Yahoo Finance covering the crypto and stock markets. Follow him on Twitter at @DsHollers
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