Binance Launches Initiative to Revive the Corporate Investment Industry
Cryptocurrency exchange Binance said on Thursday it committed $1 billion (about Rs. 8,200 crore) in setting up an industrial reinvestment program (IRI) to invest in companies from the digital asset sector.
The move comes at a time when the crypto market is reeling from the collapse of FTX, which is seeking Chapter 11 bankruptcy protection in the United States.
The unveiling of the world’s largest crypto exchange also raised concerns about the industry’s continued ability to attract investment from venture capital and private equity.
Binance said it intends to increase the amount of its commitment to $2 billion (about Rs. 16,340 crore) in the near future depending on demand.
“We expect that this initiative will last about six months and will be flexible in the investment structure – token, fiat, equity, convertibles, debt, lines of credit, etc.,” the crypto exchange added in a statement.
Zhao said when he spoke at a conference in Abu Dhabi last week that there is significant interest from industry players in the rescue fund his company plans to launch to help cryptocurrency projects that are facing a reduction in capital, following the collapse of rival FTX.
He said such a fund would help “reduce some of the negative effects of FTX” without giving an exact amount for the fund.
Several crypto firms have been scrambling since the collapse of FTX, with many counting their exposure in the millions on heavy trading.
It was reported a few days ago that Binance is also under global regulatory scrutiny following the sudden collapse of the FTX cryptocurrency exchange and its subsidiaries. While speaking to reporters, Republican Patrick McHenry, the top House Republican, confirmed that Binance’s role in the collapse of FTX is under scrutiny by Congress. Binance CEO Changpeng Zhao aka CZ, however, has come out and strongly denied that he played a role in the fall of FTX, explaining that his exchange is a victim of the situation.
Binance has been arguing that the cause of FTX’s downfall was ‘funding irregularities and possible fraud’. in written comments to a UK parliamentary committee. Notably, their UK counterparts want to know what role Binance played in FTX’s downfall.
© Thomson Reuters 2022