Rumors are circulating that Binance could announce a bailout given its healthy cash reserves. However, Binance finally pointed out that there are bad projects and they should not be bailed out. The announcement comes after FTX got in touch with the lenders of crypto in trouble BlockFi and travel.
Binance will not support “bad” and failed projects.
Changpeng ZhaoCEO of Binance and one of the industry’s leading crypto proponents, has shared his thoughts on project bailouts and supporting the digital asset ecosystem during a severe crypto downturn.
— CZ 🔶 Binance (@cz_binance) June 23, 2022
The world’s largest cryptocurrency exchange has a role to play, says CZ. This citing its aggressive cash reserves and status as an industry player. Zhao noted that this obligation exists regardless of the potential benefits or losses of Binance. The leader of Binance further added that the rescue plan is not binary and the support plan during this period should be based on several factors. “The bailout here doesn’t make sense”said Zhao.
On the other hand, some projects make mistakes along the way, but still make up for them. According Zhaothese projects have built better products that deserve a bailout
“They’re either too aggressive on spending, have insufficient reserves, or have other minor fixable issues. These projects generally have good qualities: product-market fit, revenue generation under normal market conditions, strong business models, decent teams, etc. »
Bonus: VanEck and Investo are launching a crypto ETF in Brazil allowing instant, permissionless transfer.
SEC commissioner opposes bailout.
The SEC Commissioner, Hester Piercecrypto-friendly, dissented shortly after FTX announced a $250 million bailout of BlockFi. The recent stock market crash, she said, was a natural process of separating the strong from the weak. Let things unfold naturally.
She said: “Crypto does not have a rescue mechanism […] I don’t want to come in and say we’re going to try to find a way to bail you out if we don’t have the power to do it. But even if we did, I wouldn’t want to use that authority, we really have to let these things play out.
In addition, Piercealso said the slowdown could be a valuable learning opportunity for market participants and regulators.
To go further: The Ontario regulator OSC is taking tough action against Bybit and KuCoin exchanges.
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Binance refuses to bail out bad crypto projects amid market downturn. – Latest News
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