Following a series of crises rocking the cryptocurrency space, Binance has announced plans to partner with other industry players with cash to provide liquidity support for strong cryptocurrency projects in a liquidity crisis.
Other industry players, Tron, Huobi Global and Poloniex have said they will support Binance through co-investment in this initiative.
Earlier this year, Luna with a $40 billion market value plunged to zero with cryptocurrency investors and other people familiar with the situation accusing the founder of transferring millions of dollars from the project prior to the collapse.
Similarly, the FTX exchange platform collapsed with billions of investors’ funds, sending the entire cryptocurrency market into panic with the CEO of Binance predicting more collapse from poorly managed fraudulent companies. This led to aggressive withdrawals from both viable and questionable cryptocurrency projects and subsequently, the stoppage of withdrawal by most cryptocurrency platforms and the eventual decline of Bitcoin below $18,000 a coin to $16,000, down from about $66,000 it traded in 2021.
To avoid more viable cryptocurrency project filing for bankruptcy because of low liquidity caused by the activities of fraudulent projects, Binance and other key players in the industry will start co-investing in them during a crisis like this.
“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. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify,” Binance CEO stated.
“Also, welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let’s rebuild.”