Binance converts Industry Recovery Initiative funds to BTC, ETH, and BNB

Changpeng Zhao attributed the initiative to “changes in stable coins and banks”

13.03.2023 - 09:15

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3 min

What’s new? Binance CEO Changpeng Zhao has announced that the exchange will convert the $1 billion Industry Recovery Initiative funds from Binance USD (BUSD) stablecoins to bitcoins, Ethereum, and Binance Coin (BNB). He attributed the decision to “changes in stable coins and banks.” For example, previously the commercial bank Silicon Valley Bank (SVB) collapsed and was closed by the US authorities. After that, Circle (the issuer of the USDC stablecoin) reported that it kept about $3,3 billion of reserves in the bankrupt institution. Regulators later set up a plan to recover funds from SVB depositors that did not include a bailout of the bank itself.

Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency. — CZ 🔶 Binance (@cz_binance) March 13, 2023

What is known about the fund? Zhao announced the launch of the fund after the bankruptcy of the FTX crypto exchange in November 2022 to help “projects who are otherwise strong, but in a liquidity crisis,” urging other major companies to participate in its formation.

In early February, with the funds of the Binance fund, it bought a controlling stake in the South Korean Gopax crypto exchange, which was facing a liquidity crisis.

Binance and BUSD. In February, the US Securities and Exchange Commission (SEC) notified the issuer of BUSD, Paxos, of the violations, and the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing new stablecoins.

Zhao has since stated that the asset is fully owned and operated by Paxos, and the company will continue to service all operations with it. Binance will also support BUSD for the foreseeable future. However, the exchange chief acknowledged that BUSD users would gradually migrate to other assets.

Zhao later urged crypto businesses serious about their projects to move to countries with favorable regulation: the UAE, France, and Bahrain.

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