Crypto will be fine, announce an industry recovery fund

The CEO of the largest online cryptocurrency exchange said on Wednesday that it is setting up a recovery fund to help people in the industry while saying the sector “is going to be fine.”

“We want the strong players today to protect the good players in the industry who might be hurt in the short term,” Binance CEO Changpeng Zhao said during an interview with CNBC’s Dan Murphy at Abu Dhabi Financial Week.

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“It doesn’t mean we can save everyone. If a project is poorly managed on multiple fronts, we won’t be able to help them anyway.”

Cryptocurrency has “showed extreme resilience,” Zhao said, indicating that he does not expect the recent disruption to the industry to cause long-term damage. He did not specify an exact number for the size of the recovery fund.

His comments come just one week after Binance Undo the deal To save the competing FTX exchange, which He declared bankruptcy on Friday.

price bitcoin It fell below $17,000 for the first time since 2020 and there are fears of a so-called ‘crypto infection’ It could lead to the downfall of other big industry names, such as Crypto.com. CEO of the company He denied the allegations He said the platform was “business as usual”.

“In the short term, it’s a lot of pain, but in the long term, it accelerates our efforts to make this industry healthier,” Zhao said.

On Monday, the CEO said that Binance had seen a “slight increase in withdrawals” in the past week, but said: This was in line with other declines In the market.

“When prices go down, we see withdrawals go up,” Zhao said. “This is very normal.”

Zhao said he wanted to form an organization that could “create best practices” across the industry, ie Known for lack of organization.

“Regulations need to be adapted to the industry,” Zhao said. He added, “Regulation isn’t going to fix all of this, it’s going to reduce it. It’s important, but we have to have the right expectations.”

Zhao pondered how there could be elements of traditional finance that could help the cryptocurrency market become more regulated and reliable, but practices would have to be adapted to be fit for purpose.

The “transparency” and “audit” aspects of traditional finance can benefit the cryptocurrency industry, but there are “subtle but very important” differences that need to be made, according to the CEO.

“A lot of regulators are more of a traditional mindset,” he said, “they need a crypto mindset.”

The comments echo those from Brad Garlinghouse, CEO of Ripple, who said that the idea that cryptocurrency is “unregulated” is overrated, but that “transparency builds trust.”

“Cryptocurrency hasn’t just been sunshine and roses, and as an industry, it has to mature,” Garlinghouse said on CNBC’s “Squawk Box Europe” on Wednesday.

Economist Nouriel Roubini took a different stance in his interview at Abu Dhabi Financial Week and I described cryptography and some of its major players as a “completely rotten ecosystem”.

The NYU professor said there are “seven cryptocurrency CCs”: “hidden, corrupt, scammers, criminals, scammers, carnival barkers” and, finally, Changpeng Zhao himself.

— CNBC’s Jenny Reed and Ryan Brown contributed to this report.