Cryptos Rebound After Binance CEO Announces Industry Recovery Fund, Calls For Regulation
Following the collapse of Sam Bankman-Fried’s FTX crypto exchange, wiping out hundreds of billions of dollars in crypto market value (and spilling over into broader equity markets), with risks mounting that other exchanges could see similar bank runs, Binance CEO Changpeng Zhao “CZ” unveiled that he was preparing a crypto recovery fund to industry players facing a liquidity crunch and called for regulations.
“To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis,” CZ tweeted early Monday, adding that he welcomes “other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let’s rebuild.”
Also welcome other industry players with cash who wants to co-invest.
Crypto is not going away. We are still here. Let’s rebuild.
— CZ 🔶 Binance (@cz_binance) November 14, 2022
After tumbling earlier in the session, Bitcoin and Ethereum immediately jumped on the tweet that has received more than 48k likes and nearly 9.5k retweets. The upside move in Bitcoin was about 7%.
At the G20 summit in Bali, CZ called for more regulations, according to Reuters.
“We do need to do this properly, we do need to do this in a stable way.”
“I think the industry collectively has a role to protect consumers, to protect everybody. So it’s not just regulators. Regulators have a role but it’s not 100% their responsibility.”
CZ’s tweet comes after rival FTX filed for bankruptcy on Friday. As of last Thursday, FTX Trading International only had $900 million in liquid assets against $9 billion of liabilities. Then there were reports over the weekend that hundreds of millions of dollars were stolen from FTX’s crypto wallets in a brazen hack. This led some in the crypto community to worry about the stability of other exchanges.
Early last week, CZ abandoned a move to rescue FTX. After walking away from the rescue deal, Binance released this statement:
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”
For now CZ’s announcement appears to have halted the death by billions of sell orders that have hit crypto but as many have warned in the past two days, it is only a matter of time before the next major crisis tests the faith of the bulls.
Mon, 11/14/2022 – 07:55