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Binance Chief Doubles the Target for Crypto Recovery Fund to $2 Billion

Binance Chief Doubles the Target for Crypto Recovery Fund to  Billion

Binance CEO Changpeng Zhao has been actively working to establish a recovery fund to assist distressed but fundamentally strong firms since the collapse of the crypto exchange FTX. Binance has also increased its fund-raising plans from $1 billion to $2 billion.

During his interview on Thursday, November 24, Zhao stated that the crypto recovery fund will have co-investors to support crypto projects experiencing liquidity constraints. “We’re taking a loose approach, with different industry players contributing as they see fit,” he explained.

Polygon Ventures, Jump Crypto, Animoca Brands, Aptos Labs, Kronos, GSR, and Brooker Group, among others, have already pledged $50 million. The Binance CEO stated that he is working to limit the impact of FTX’s demise on the crypto sector.

Binance has not yet confirmed how much it is willing to invest. According to sources, Binance’s potential contribution far outweighs the commitments made by other firms. The portfolio manager of the King River Digital Assets Fund, David Adams According to Bloomberg:

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

Zhao’s Credibility at Stake with Crypto Recovery Fund

Although the Binance CEO is using this opportunity to increase his credibility in the crypto space, the fact that his tweets triggered the turn of events at FTX has raised some concerns. Some UK lawmakers have also demanded that Binance explain the circumstances surrounding Zhao’s tweets on November 6.

The lawmakers want to know if the company realized the significance of the tweets. Hayden Hughes, CEO of social trading platform Alpha Impact, stated:

“There is too much uncertainty in the market for the recovery fund to be the catalyst that turns everything around.” We still don’t know how widespread the virus is. “But I believe we are at or near the bottom, and I don’t expect markets to fall much further from here.”

On the other hand, regulatory tensions with Binance remain because the exchange holds licenses in various states but has no formal base anywhere.

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