Binance commits $1 billion to bail out troubled criptocurrency firms

The FTX is still reeling from the sudden collapse of the coin exchange, but investors are increasingly worried about the spread of the FTX contagion on other exchanges. Since the collapse of FTX two weeks ago, Genesis and BlockFi stopped lending and stopped customer withdrawals.

The world's largest criptocurrency exchange Binance is aiming to reassure jittery customers and restore faith in the industry with a pledge to help struggling criptocurrency firms. The move comes at a time when the entire criptocurrency market is facing the ripple effect of the now-bankrupt FTX.

As FTX spreads, the company is committing a $1 billion fund to bail out distressed companies, according to Binance CEO Changpeng Zhao CZ. The fund will be used to create an industry recovery initiative IRI to invest in companies from the digital assets sector.

A day after the announcement, CZ announced another $1 billion, making a total of $2 billion. CZ said yesterday that Binance allocated another $1 billion to the industry in a post on Twitter. An initial $1 billion BUSD deposit for the recovery fund comes from Binance's own assets, according to the exchange giant. The details of the transferring wallet quickly raised questions on Twitter. Some within the community were concerned that Binance might have used customer assets to fund the initiative.

According to CZ's tweet, Twitter user DegenSpartan said if you check etherscan it is tagged as a binance 7 and industry recovery initiative. On November 8, Binance reached a non-binding agreement to buy FTX. The world's largest cripto exchange backed out of the deal after it learned that FTX's financials are in much worse shape than let on.

We covered Binance a number of times on our platform. Zhao, who was born in China, emigrated to Canada at the age of 12 years old. He co-founded Binance in 2017 with his friend Yi He.

Prior to founding Binance, CEO Changpeng Zhao founded Fusion Systems in Shanghai in 2005, the company that built high-frequency trading systems for brokers. In 2013, he joined Blockchain.info as a third member of the team. He worked at OKCoin for less than a year as a CTO, a platform for spot trading between digital assets and fiat.