Early Friday morning, Binance CEO Changpeng Zhao said the company has committed an additional $1 billion to its “relief fund” aimed at helping struggling businesses in the crypto industry.
Binance’s efforts were accelerated following the collapse of FTX earlier this month, which led to the company, once valued at $32 billion, filing for bankruptcy protection and leaving the crypto industry frozen in its wake.
Earlier this month, Binance went away of an alleged agreement to buy FTX.
Binance’s recovery fund, which now totals $2 billion, targets struggling opportunities in the industry and already has 150 applications from companies seeking support, according to the company.
With no support or interest in central bank bailouts, crypto firms have no choice but to turn to this fund, dubbed the “Industry Recovery Initiative” or IRI, as the biggest source. current relief from the crypto sector.
“Each investment opportunity will be considered on its own merits by each IRI participant acting on their own behalf, including appropriate 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 aggregate commitment of $50 million. Notably, Jump Crypto, Animoca Brands, and GSR all disclosed their exposure to FTX without giving a financial loss figure.
Binance taking on the role of one of crypto’s last remaining lifelines is a welcome sign, according to Conor Ryder, a research analyst at crypto analytics firm Kaiko.
While the initiative bears some of the hallmarks of FTX taking on a similar role over the summer, Ryder told Yahoo Finance that this latest effort has a few key differences.
The fund is tied to a public wallet address, which means “no more opaque relationships between exchanges and their investments,” according to Ryder.
At the start of the week, the the wall street journal reported that Binance, along with Apollo, had been approached by leading crypto broker Genesis Trading, which had been seeking emergency funding since its lending business suspended withdrawals on November 16.
Binance said it pulled out of the bid because some of Genesis’ business potentially posed a conflict of interest with its own. This morning, Binance told Yahoo Finance that its stance has not changed.
“It was reassuring to see Binance turn down the offer,” Ryder added. “Conflict of interest seemed to be something FTX specialized in, in hindsight, so the reluctance to enter into an ambiguous relationship is encouraging.”
On Tuesday, FTX’s legal counsel in court called the exchange’s collapse earlier this month, “the most brutal and difficult collapse in the history of American companies.“
Court records showed that FTX owes its top 50 creditors a total of $3.1 billion.
David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrency and stock markets. Follow him on Twitter at @DsHollers