Major cryptocurrencies heaved a sigh of relief amidst the constant battering it has received over the past week, when most of them rose after a tweet by Binance chief executive Changpeng Zhao saying he plans to launch a fund to help crypto projects facing a liquidity crisis following the FTX fall.
Bitcoin jumped almost $1,000 to $16,806 on Monday after the announcement, which did not divulge any further details of the plan. Ethereum moved up nearly $82 from $1,180. At the time of writing the story, Bitcoin was at $16,742 and Ethereum was at $1,259.
Zheng said in his tweet: “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.”
He then added a second tweet urging other crypto exchanges with cash to join the project.
“Also welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let’s rebuild,” said Zheng, popularly known as CZ, in his second tweet.
Binance had earlier announced that it would rescue FTX, but abandoned the plan and the rival exchange, owned by Sam Bankman-Fried, collapsed. This led to panic in the crypto market, with customers making huge withdrawals, leading to a severe liquidity crisis for many exchanges and drop in most crypto prices.
A public spat between CZ and SBF, as Bankman-Fried is known, is said to have led to Binance selling FTT, which led to nearly $6 billion withdrawal over a period of 72 hours.
However, Zhao tweeted that Binance had “never shorted FTT”.
He added: “We still have a bag of (FTT) as we stopped selling FTT after SBF called me. Very expensive call.”
Earlier on Monday, Zhao spoke at a gathering of G20 leaders at a summit in Bali and called for new but stable and clear regulations for the industry.
“We’re in a new industry, we’ve seen in the past week, things go crazy in the industry,” Zhao was reported as saying by Reuters. “We do need some regulations, 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 percent their responsibility.”
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