• Ar
  • Es
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Feature
  • Videos
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Feature
Videos
Infographs
In Pictures
  1. Home
  2. News
  3. Economy
  4. Binance reveals $1 bil in recovery fund following FTX bankruptcy chaos
Economy

Binance reveals $1 bil in recovery fund following FTX bankruptcy chaos

  • By Al Mayadeen English
  • Source: Agencies
  • 25 Nov 2022 11:02

The FTX bankruptcy forces Binance to start a $1 billion recovery fund that could become $2 billion if the market needs it.

  • Binance recovery fund for FTX revealed (Reuters)
    Binance recovery fund for FTX revealed (Reuters)

Famed cryptocurrency exchange Binance revealed updated details about its industry recovery fund on Thursday, which intends to support struggling players in the aftermath of FTX's disastrous bankruptcy.

Binance stated in a blog post that it will contribute $1 billion to the recovery fund as a first pledge. 

The company also noted that it may expand that sum to reach $2 billion if needed.

Additionally, investment companies focused on cryptocurrencies including Jump Crypto, Polygon Ventures, and Animoca Brands have committed $50 million to the project.

We do this honestly, stated Binance CEO Changpeng Zhao as he published the public wallet address demonstrating the company's initial pledge.

It is worth reminding that Binance created the fund in an effort to support the cryptocurrency market after FTX, the exchange founded by businessman Sam Bankman-Fried, declared bankruptcy earlier this month.

Major banks see profits from crypto leftover, but FTX is a threat

As major banks and financial institutions steered away from what Jamie Dimon called a “decentralized Ponzi scheme,” the gap was filled by small lenders who saw profit in helping service companies that include but are not limited to, Silvergate Capital Corp., Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank and Customers Bancorp Inc. The latest crackdown and collapse of FTX puts them center-stage.

Silvergate goes back with cryptocurrency to when it first began with just Bitcoin. The former's CEO, Alan Lane, saw potential in building products to serve the market's needs: “What I saw,” he said, “was an opportunity to bank these companies that were essentially being de-risked from other banks.”  

Lane set up a payment network that connects dollars and crypto, through his Silvergate Exchange Network (SEN), which offers users the opportunity to transfer around dollars between each in order to settle their crypto transactions any time during the day or night. The network passed $1 trillion in cumulative payment volumes earlier this year, with one customer being the infamous FTX, whose founder, Sam Bankman-Fried, is now disgraced.

"I'm really sorry, again, that we ended up here. Hopefully, things can find a way to recover," Bankman-Fried, nicknamed the 'King of Crypto', wrote on Twitter when the exchange collapsed "I was shocked to see things unravel the way they did."

Bankman-Fried tried to organize a bailout but failed - this left FTX struggling to raise billions of dollars and many customers unable to retain their money.

The win for Silvergate was that most of its profits were from deposits left by digital customers on its network, which amounted to 90% of the bank’s overall deposit base, almost $11.9 billion. They were later reinvested in securities to earn the $11.4 billion securities portfolio, which generated 2.2% over the three months to September.  

Read more: Bitcoin crashes below $17,000 after Binance cancels FTX acquisition

  • Binance
  • FTX
  • Cryptocurrency
  • Cryptomarkets

Trending Now

All
US Treasury's Secretary Janet Yellen

US Treasury Secretary: Crypto markets need better oversight

Most Read

Haaretz

Mossad agent killed in Italy part of anti-Iran mission: Israeli media

  • Europe
  • 3 Jun
In this image released by the Italian firefighters, a helicopter searches for missing passengers after a tourist boat capsized in a storm on Italy's Lago Maggiore in the northern Lombardy region, May 28, 2023 (AP)

Top Israeli intelligence official dead in Italy: Israeli media

  • Europe
  • 29 May
US linguist Noam Chomsky, who was among 550 academics who signed the petition calling on Glasgow University to respect free speech (AFP)

Chomsky: EU will deindustrialize if it abides by US-run world order

  • Europe
  • 31 May
Singer Adele performs during the Oscars at the Dolby Theatre on Sunday Feb. 24, 2013, in Los Angeles. (AP)

Calls for Adele to cancel her 'Israel' concert

  • Palestine
  • 31 May

Read this

All
Brazil
Latin America

Brazilian feds formally charge 2 more in murder of Philips and Pereira

  • Today
A man cycles past graffiti on in the Tower Hamlets neighborhood in London, Friday, July 22, 2022. (AP)
Europe

UK youngsters face increasing exploitation risk as poverty increases

  • Today
U.S. President Joe Biden, right, listens to British Prime Minister Rishi Sunak during a meeting on the sidelines of the G20 summit meeting, Nov. 16, 2022, in Nusa Dua, Bali, Indonesia. (AP)
US & Canada

Sunak to lobby for Sec Def to be next NATO head, seeks Biden's support

  • Today
Zlatan Ibrahimovic gestures to his fans during a football match (AFP)
Europe

Football Legend Zlatan Ibrahimovic retires at 41

  • Today
Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS