On Wednesday, the chief executive of the biggest crypto exchange in the market announced that he was launching a recovery fund for providing assistance to people in the industry.
He also asserted that the crypto sector would turn out fine, reassuring everyone after the FTX disaster left the entire industry reeling.
Changpeng Zhao, or CZ, as he is known, said that they wanted strong players to protect the good ones who might be hurting in the short term.
No long-term damage
The Binance CEO certainly did not imply that they would be able to save everybody. He stated that they would not be able to offer assistance to a project suffering on multiple fronts.
He went on to say that crypto had proven to be quite resilient and he did not believe there would be any long-term damage because of the recent turmoil in the space.
It should be noted that the CEO did not mention the precise figure to indicate just how big the said recovery fund is.
This move comes just a week after his exchange backed out of a non-binding agreement to purchase FTX, the crypto exchange that declared bankruptcy the previous Friday.
The market impact
There have been a lot of concerns about the crypto market, as Bitcoin saw its price drop below $17,000 after 2020.
People are also worried that the so-called crypto contagion could have an impact on other big names in the market, such as Crypto.com.
These claims were denied by the CEO, who said that his exchange was operating as usual. Zhao stated that there would be considerable pain in the short term.
But, he said that they would help speed up the efforts in making the crypto industry better in the long term.
On Monday, he said that Binance had seen a slight uptick in withdrawals, but it usually happens when the market dips.
The Binance boss also stated that he wanted to set up an organization for establishing ‘best practices’ in the crypto industry that remains unregulated for now.
He said that the industry needs regulation, but it will not fix everything. It will only reduce what is happening, but they need to manage their expectations the right way.
He also asserted that traditional finance had some elements that could be handy for the crypto market because it can improve regulation and would help establish trust.
But, in order to accomplish this, they would first need to adapt practices that can be helpful. The CEO said that the ‘audit’ and ‘transparency’ elements of traditional finance can be beneficial.
However, he also added that they would need to be adapted for the crypto industry. He stated that most of the regulators out there need to develop a crypto mindset instead of using the traditional one.
Brad Garlinghouse, the CEO of Ripple Labs, also made similar comments. He said that crypto needs time to mature and transparency could be helpful in improving its credibility.