Crypto Crash: It Seems Like a New Savior Can Stop the Crisis,The distinction between CZ and SBF

  •  Crypto Crash: It Seems Like a New Savior Can Stop the Crisis


  • To prevent it from entering an unheard-of slump, the cryptocurrency market appears to have found a new savior.
  • The FTX cryptocurrency exchange filed for Chapter 11 bankruptcy just over three days ago, and now a new player is stepping up to try to reassure investors. This is Binance, the top cryptocurrency exchange in the world for cryptocurrencies including bitcoin and ether (ETH), dogecoin (DOGE), polka dot (DOT), and avalanche (AVAX). Changning Zhao, the founder of Binance and a crypto billionaire, has announced the establishment of a fund that will act as a bank for cryptocurrency companies experiencing a liquidity problem. However, the group made it clear that only strong projects would be eligible to receive funding from this emergency fund. Binance is establishing an industry recovery fund to assist projects that are otherwise strong but are experiencing a liquidity crisis in order to lessen the cascading negative effects of FTX, Zhao announced on Twitter. "More information is coming soon. If you believe you are eligible, please get in touch with Binance Labs right away.
  • The finance branch of Binance is called Binance Labs.
  • Zhao has also made the decision to make this fund open to other participants and investors who want to support the crypto industry, which is reeling from the failure of FTX, which was valued at $32 billion in February but ran out of money a few months later.
  • Rebuild Together
  • Zhao also said: "Also invite other market participants with cash who want to co-invest. Cryptocurrency is here to stay. We remain in place. Let's start over."
  • The billionaire omitted to provide more information about this fund. As of November 13, the Bloomberg Billionaires Index estimated Zhao's net worth to be $18.2 billion. The cryptocurrency market, which has started to recover a little bit, reacted with relief to Zhao's comments. According to research firm CoinGecko, Bitcoin, the most well-known digital currency, rose 0.7% to $16,757.47 on the previous day after falling 20% over the previous seven days. In the last day, ETH increased 1% to $1,252.29 (USD). However, ETH has decreased by more than 20% during the past week.
  • Even Solana (SOL), a cryptocurrency linked to the FTX, recovered 2.2% after falling 57% over the previous seven days. The recovery fund's effects won't be noticed right away, but they may contribute to the industry's long-term revival, according to Vlad Gorbunov, founder and CEO of the cryptocurrency company Choise.com. In the long run, the industry may unite to preserve other larger projects that are in danger of failing, since Justin Sun of Tron has already pledged his support for the campaign. This will fuel the highly segmented growth of crypto assets and have an untold impact on maintaining industry trust. It feels a little familiar seeing Binance and Zhao, known as "CZ" in the cryptocurrency world, emerge. As a result of the sudden collapse of sister cryptocurrencies Luna and UST or Terra USD, which caused a credit crunch in the summer, FTX and its founder and former CEO Sam Bankman-Fried rose to the status of industry saviors. Numerous failing cryptocurrency lenders, including as Voyager Digital, Celsius Network, BlockFi, and Robinhood, had been helped by them. More than twenty cryptocurrency companies are connected to Bankman-Fried, sometimes known as "SBF" in the industry. However, we now learn that Bankman-Fried and FTX likely used their clients' money.
  • The distinction between CZ and SBF
  • However, Binance and Zhao are different since they let other investors join their rescue fund, whereas FTX and Bankman-Fried did it on their own.
  • As a cryptocurrency exchange, FTX carried out orders on behalf of its customers, accepting their money and purchasing coins. As a custodian, FTX kept the clients' digital currency.
  • Then, through the trading division of its sister firm, Alameda Research, FTX exploited the cryptocurrency holdings of its clients to earn money by borrowing or market making. In the summer of 2022, FTX bailed out other crypto institutions with the money it had borrowed. FTT, the cryptocurrency FTX was issuing, was being used as collateral on the company's balance sheet at the same time. Due to the concentration risk and the volatility of FTT, this exposure was quite large.
  • Clients scrambled to liquidate their crypto assets and get their money back as soon as this exposure was made public out of fear that FTX might crash. On November 6, customers made a record $5 billion in withdrawals from the exchange.
  • As a result, FTX was unable to fulfill the sell orders of its clients because it lacked the crypto assets that were now being lent out or sold. Investors worry that the bankruptcy filing of FTX will have an impact on numerous companies, many of which are anticipated to file for bankruptcy. A few businesses have already begun revealing their vulnerability to FTX.
  • Binance's CZ tweets, "Clear Sign Of Problems," while Crypto.com CEO claims that ETH worth $300 million was transferred "erroneously."
  • According to the CEO of the company, on October 21 Crypto.com sent erroneously more than 320,000 Ether (CRYPTO: ETH) worth roughly $400 million to rival cryptocurrency exchange Gate.io.
  • In response to the tweet, CEO of Crypto.com Kris Marszalek stated that a human error resulted in the transfer.
  • Someone on Marszalek's team unintentionally sent about 80% of their ether reserves to a "whitelisted exchange," according to Marszalek. According to him, the funds were to be transferred to a brand-new cold storage wallet.
  • The message was sent to a whitelisted external exchange address instead of the intended new cold storage address. The money was eventually returned to our cold storage after our collaboration with the Gate team, according to Marszalek.
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  • The entire amount of ether was found, said Marszalek.

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