The CEO of Binance has claimed the fledgling crypto industry “will be fine” despite the recent market turbulence caused by the collapse of rival exchange FTX.
Changpeng Zhao also claimed to be working on establishing a recovery fund for people in the market. The news comes after Binance backed out of a deal to rescue FTX, before the firm declared bankruptcy on Friday.
“We want the strong industry players today to protect the good industry players who might just be hurt short term,” the Binance CEO told CNBC.
Zhao noted, however, that he wasn’t saying “we can save everybody.”
“If a project is mismanaged on multiple fronts we won’t be able to help them anyway,” he said.
Zhao has not yet specified just how much money will be put into the recovery fund.
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According to CNBC, Zhao suggested that he didn’t expect the recent downfall of the industry to cause long-term damage and said cryptocurrency had “shown extreme resilience.”
Bitcoin is in a rough place at the moment
The news comes as the chilly winds of the cryptocurrency winter keeps blowing across the market.
Bitcoin is in a very rough spot at the moment. The price of bitcoin recently dropped below $17,000 for the first time since 2020.
There are fears that the downfall of crypto and platforms like FTX could lead to the collapse of other big industry platforms like Crypto.com.
Kris Maeszalek, CEO of Crypto.com, took to social media to quell the fears of its customers claiming that their deposits were safe in the company.
Zhao claimed that the “slight increase in withdrawals” from Binance last week was just in line with other dips in the market.
“Whenever prices drop, we see an uptick in withdrawals,” Zhao told CNBC.
“That’s quite normal.”
The Binance CEO said he wants to put together an organisation to “establish best practices” across crypto, which is currently extremely unregulated.
Zhao said: “Regulations need to be adapted for this industry.
“Regulation won’t fix all of this, it will reduce it. It’s important but we’ve got to have the right expectations.”
At the same time, capital raises in the blockchain industry have plummeted in 2022, compared to the year before, according to data from research firm GlobalData.
In 2021, the global industry raised over $26.6bn in new funding. However, that figure has shrunk to $18.2bn so far this year.
There are two things to note about those stats, though: firstly, there is always a lag on these stats with new rounds being announced all the time, and, secondly, those figures are still above the numbers from the previous record year of 2019. That year the sector raised just over $5.9bn.
GlobalData is the parent company of Verdict and its sister publications.