The chaotic turn of events surrounding FTX left a strong feeling of mistrust about the world’s leading cryptocurrency exchanges.
Due to the market value crash, several important cryptocurrency projects are on the verge of facing serious liquidity issues. With that in mind, Changpeng Zhao, Binance’s CEO, announced his company will develop a new “Industry Recovery Fund”, in order to bail out projects in need.
Chief of Operations Speaks On Industry Recovery Fund
On Twitter, CZ talked about how important this measure is for the future of the development of digital assets.
“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 wrote. “More details to come soon. In the meantime, please contact Binance Labs if you think you qualify.”
The CEO finished his post by welcoming other industry giants to join the fund and help create a more favorable economic environment for up-and-coming crypto projects.
“Also welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let’s rebuild.”
After Effect of FTX
The negative effects left by Sam Bankman-Fried & his company’s downfall will likely leave a mark on the industry.
This week, Bahama’s police forces started an investigation into the crypto firm potential wrongdoings. No one knows for certain what exactly caused the downfall of the exchange, however, what is tangible is the fact that thousands of people lost billions of dollars collectively.
Even celebrities like Tom Brady and NBA’s Klay Thompson reportedly lost millions of dollars invested in digital assets that went downhill after the series of catastrophic events.
Leading cryptocurrencies also suffered a major hit. Bitcoin dropped to its lowest price in over 2 years, while Ethereum came really close to going below the $1,000 mark.
Meanwhile, Solana – a blockchain that shared deep connections with FTX – lost over 60% of its value since October.
According to CoinMarketCap, SOL lost 61.6% of its value in the previous seven days. Solana prices are presently 95% lower than their all-time high of November 6, 2021.
Due to the highly questionable series of events, Sam Bankman-Fried is now being accused of misusing over $10 billion of customer funds from Alameda Research (another company owned by him), to give out loans to FTX.
FTX allegedly lent more than half of its client assets to Alameda, which used them to bet on other cryptocurrencies and assist other crypto businesses suffering to weather a market collapse.