Crypto CEO pledges to build $1 billion fund to help struggling industry

FTX’s collapse has further boosted plans to gather partners for a fund to support cash-strapped crypto projects

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Crypto billionaire Changpeng « CZ » Zhao further outlined his plans to support the struggling industry, pledging to raise at least US$1 billion for the purchase of struggling assets and stating that his Binance Holdings ltd. would make another bid for bankrupt lender Voyager Digital.

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In an interview Thursday with Bloomberg Television’s Haslinda Amin, Zhao provided the most detailed insight yet into the various transactions Binance is looking at following the disorderly collapse of rival FTX. The centerpiece of Zhao’s plan is to gather partners for a fund to support promising but cash-strapped crypto projects.

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« We are taking a loose approach where different industry players will contribute as they wish, » he said. Zhao added that he will publish a blog post soon providing more details about the fund.

Zhao said he was looking to limit the damage to the crypto sector from the FTX implosion – an event Binance chief himself helped accelerate with a Nov. 6 tweet about plans to sell Binance. $530 million stake of FTX’s native digital token. Before his empire fell, FTX founder Sam Bankman-Fried agreed to several deals that are now in limbo, including the purchase of Voyager.

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One question Zhao left open is where Binance will be headquartered, saying only that Dubai and Paris are now its « global hubs ».

According to the Bloomberg Billionaires Index, this year’s deep crypto rout slashed about $80 billion from Zhao’s personal fortune, but at $15 billion, it still far exceeds that of anyone else. in crypto.

Voyager Auction

Zhao said Binance US plans to relaunch its bid for Voyager’s assets, a deal that came back into the limelight after FTX filed for bankruptcy. Binance will compete with crypto exchange CrossTower Inc. and other companies for Voyager.

Binance is also in talks with Genesis Global, the US-based cryptocurrency broker seeking emergency funding to stay afloat, Zhao said. The struggling brokerage has $2.8 billion in outstanding loans on its balance sheet, with about 30% of its loans to related parties, including its parent company, Barry Silbert’s Digital Currency Group.

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Zhao said a Genesis collapse might only affect some large institutional players and sought to minimize potential damage to the industry as a whole.

« There will be pain every time a player falls, » he said.

The crypto billionaire, who moved to Dubai last year, has expanded his company’s presence in Europe and the Middle East. « Today we have the largest offices in Dubai and Paris, so you can consider them global hubs, » Zhao said, declining to disclose the company’s headquarters.

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With FTX now bankrupt, Zhao’s interactions with its former competitor come full circle. Binance initially agreed to buy FTX as it began to crumble, then pulled out after Zhao realized the precarious state of the Bankman-Fried exchange.

Binance did not have access to any books or trading history of FTX and could not trust the information provided, Zhao said in the interview. The exchange now plans to review FTX’s assets as they go through bankruptcy proceedings, he said.

« They invested in a number of different projects, some of them are OK, some of them are bad but I think there are some assets that are salvageable, » Zhao said.

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