Crypto will be fine, industry recovery fund announces

The CEO of Binance, the largest online cryptocurrency trading exchange, said he is establishing a recovery fund to help people in the industry, while saying the industry will be fine.

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The CEO of the largest online cryptocurrency trading exchange said on Wednesday that he is setting up a recovery fund to help people in the industry, while saying the industry will be fine.

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

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“That doesn’t mean we can save everyone. If a project is mismanaged on multiple fronts, we can’t help them anyway.”

Zhao said cryptocurrency had “showed extreme resilience,” suggesting he didn’t expect the recent turbulence in the industry to do long-term damage. He did not give an exact figure for the size of the recovery fund.

His comments come just a week after Binance pulled out of a deal to bail out rival exchange FTX, which filed for bankruptcy on Friday.

The price of bitcoin has dropped below $17,000 for the first time since 2020 and there are concerns that the so-called “crypto contagion” could lead to the demise of other industry big names such as Crypto.com. The company’s CEO denied the claims, saying the platform was doing “business as usual”.

“There is a lot of pain in the short term, but in the long term it accelerates the efforts we are making to make this industry healthier,” Zhao said.

The CEO said on Monday that Binance had seen a “slight increase in withdrawals” over the past week, but he said this was consistent with other dips in the market.

“Whenever prices fall, we see an increase in withdrawals,” Zhao said. “That’s quite normal.”

Regulation helps, but does not solve everything

Zhao said he wants to form an organization that can establish “best practices” across the industry, which is known for its lack of regulation.

“The regulations need to be adjusted for this industry,” said Zhao. “Regulation won’t fix all of this, it will reduce it. It’s important, but we need to have the right expectations,” he added.

Zhao reflected on how there were elements of traditional financing that could help the cryptocurrency market become more regulated and trustworthy, but the practices would need to be adjusted to be fit for purpose.

The “transparency” and “audit” aspects of traditional finance could benefit the crypto industry, but there are “subtle but very important” differences that should be made, the CEO said.

“Too many regulators have a more traditional mindset, they need to get a crypto mindset,” he said

Crypto has never been all sunshine and roses and it's an industry that needs to mature, Ripple's CEO says

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

“Crypto has never been all sunshine and roses and as an industry it needs to mature,” Garlinghouse said on CNBC’s “Squawk Box Europe” Wednesday.

Economist Nouriel Roubini took a different stance in his Abu Dhabi Finance Week interview, describing crypto and some of its key players as an “ecosystem that is totally corrupt.”

The New York University professor said there were “seven Cs of crypto”: “Hidden, corrupt, crooks, criminals, scammers, carnival barkers,” and finally Changpeng Zhao himself.

– CNBC’s Jenni Reid and Ryan Browne contributed to this report.

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