Binance announces a recovery fund to help “otherwise strong” projects facing a liquidity crisis; Justin Sun says Tron, Huobi, and Poloniex will support Binance

Tron founder Justin Sun said that Tron, Huobi Global and Poloniex will support Binance in its initiative.

CoinDesk 2022-11-14 Sam Reynolds

Context & Ripple Effects

Binance is assembling a post-liquidity-crisis support pool with public backing from Justin Sun-linked Tron, Huobi Global and Poloniex. The initiative quickly became more than a pledge: later coverage raised questions about how Binance would decide which projects receive support and the fund’s custody, while Binance subsequently moved recovery-fund BUSD into corporate wallets.

The alignment did not create a durable unified commercial bloc. Binance.US later delisted Tron’s TRX token, and Binance reportedly declined to buy Sun’s Huobi stake.

First-order effects

Binance becomes the allocator of emergency capital for qualifying projects, while Tron, Huobi Global and Poloniex publicly associate their brands with the rescue initiative.
Projects facing liquidity pressure gain a potential funding channel, but access depends on Binance’s selection and deployment decisions.

Second-order effects

Questions over the recovery fund’s governance and wallet sourcing put Binance’s stewardship—not just the size of the pool—at the center of market confidence.
The later TRX delisting shows that support for an industry fund does not require Binance’s affiliated U.S. exchange to maintain trading support for Sun-linked assets.

Third-order effects

If exchange-led recovery pools become a recurring crisis tool, liquidity support will concentrate more influence in the hands of the platforms that control allocation and custody.
The later movement of recovery-fund assets into corporate wallets points to a structural tension between industry backstops and clear separation of customer, corporate and rescue capital.

The trend: Crypto-market crisis management is shifting toward exchange-controlled rescue pools, making governance and asset custody central to the credibility of liquidity support.

Discussion

@cz_binance @cz_binance on x
To reduce further cascading negative effects of FTX, Binance is forming an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis. More details to come soon. In the meantime, please contact Binance Labs if you think you qualify. 1/2
@cz_binance @cz_binance on x
Also welcome other industry players with cash who wants to co-invest. Crypto is not going away. We are still here. Let's rebuild. 2/2
@lmartods @lmartods on x
Basically a central bank 💀 https://twitter.com/...
@smtuffy Sean Tuffy on x
We're really just speed running the entire history of TradFi, eh https://twitter.com/...
@benedictevans Benedict Evans on x
How sure can you be that a token without a liquid market has any value at all? After all, the willingness of others to attribute value and pay for something is the only basis for the value of a token. https://twitter.com/...
@northrocklp Hal Press on x
This space will not die. https://twitter.com/...
@florianederer Florian Ederer on x
Oh cool, now they're forming a cartel. https://twitter.com/...
@edzitron Ed Zitron on x
@cz_binance Hi cz. What is the difference between someone legitimately having a liquidity problem and illegitimately having one. What is an innocent example
@statelayer @statelayer on x
i would like to put forward the ETH orderbook as a candidate https://twitter.com/...
@billbarhydt Bill Barhydt on x
Absolutely necessary. Self imposed FDIC-like fund for crypto. Bring it. We're in. https://twitter.com/...
@versusbtc @versusbtc on x
SBF said exactly the same thing. You really should withdraw all your coins from Binance. https://twitter.com/...
@justinsuntron H.E. Justin Sun on x
.@trondao @HuobiGlobal @Poloniex echo @cz_binance's initiative to participate in this industry recovery fund and help good builders and developers to recover from the crisis! https://twitter.com/...
@kyle_chasse Kyle Chassé on x
This is exactly what our industry needs. A collective fund that protects strong projects that are dealing with liquidity issues.👏 Let's help create this! https://twitter.com/...
@poloniex @poloniex on x
During the dark times, joint efforts can be especially effective. Poloniex will become a part of this initiative and contribute to the industry recovery🤝 https://twitter.com/...
@hsakatrades @hsakatrades on x
CZ: Your questions are very hypothetical situations. You can ask me the same about USDC. What happens if the govt bans USDC tomorrow? We don't know. There's a risk in everything. The moon could disappear tomorrow. What are you going to do? https://twitter.com/...
@kimdotcom Kim Dotcom on x
This is great and needed. CZ offers help to bail out exchanges, etc. in need to reduce harm for customers. Highly appreciated. Please keep us posted about progress. Thank you for facing criticism, reflecting and then acting in such a positive way @cz_binance 👍 https://twitter.com…
@birdyword Mike Bird on x
I can't wrap my head around what “otherwise strong but in a liquidity crisis” really means when you're talking about crypto. It's all liquidity, that's the game, there's no connection to the real economy so no recovery value that would imply longer-tern solvency. https://twitter.…
@myprasanna Prasanna S on x
What crap is this? Exchanges do not need to pool into an “industry recovery fund” unless you are running fractional reserves. Are you running one @cz_binance ? https://twitter.com/...
@marionawfal Mario Nawfal on x
To give you an idea of the impact this twitter space is having, we had a panelist bring up the idea of a liquidity fund to bailout/support the industry, hours after CZ spoke on this twitter space Within hours, CZ releases this new liquidity plan! https://twitter.com/... ❤️
@degenspartan @degenspartan on x
imo what we really need is much better duration risk management for *SOLVENT* entities so, exchanges should not be utilizing user deposits to earn returns, unless users explicitly request it and lenders should operate with term deposits as the norm, instead of flexible deposits h…
@chainlinkgod @chainlinkgod on x
By establishing an ‘industry recovery fund’ it looks like Binance is seeking to become the IMF of crypto i.e. serving as the lender of last resort to soak up liquidity issues Will be interesting to see what the deal terms offered are https://twitter.com/...
@simondixontwitt Simon Dixon on x
I would like to join the fund @cz_binance . Let's make sure we don't centralise the industry too though. Let's make this an industry effort. https://twitter.com/...
@coryklippsten @coryklippsten on x
How did it work out for the last guy who tried to play JP Morgan for the criminally fraudulent “crypto” industry? HUGE red flag: https://twitter.com/...
@cz_binance @cz_binance on x
Full disclosure: Binance never shorted FTT. We still have a bag of as we stopped selling FTT after SBF called me. Very expensive call. https://twitter.com/...
@cz_binance @cz_binance on x
FTT contract deployers moved all remaining FTT supply worth $400 million, which should be unlocked in batches. Not too sure what's going on. https://etherscan.io/...
@binance @binance on x
At #Binance we conduct regular reviews of listed assets to ensure they meet our standards to protect our users. Based on our recent reviews, we will remove and cease trading of several $FTT trading pairs on 2022-11-15 04:30 (UTC): 🔸FTT/BNB 🔸FTT/BTC 🔸FTT/ETH 🔸FTT/USDT
@zachweinberg @zachweinberg on x
Maybe, just maybe, we shouldn't allow any random company to create and issue its own security (ahem, token). Binance, Huobi Block FTT Deposits After $400M Worth of Tokens Illicitly Released https://www.coindesk.com/...
@ben_mckenzie Ben McKenzie on x
Through the magic of innovation we have literally traveled back in time a century. https://twitter.com/...
@fredwalton216 Fred Walton on x
1) FTT tokens follow an unlocking schedule, wherein large batches of the tokens are periodically released. On Sunday, however, tokens were released out of schedule w/o warning or communication from FTX or related parties. 192M FTT tokens were released, blockchain data shows. http…
@adamsamson Adam Samson on x
“Apple was selling computers, we were trying to reinvent the financial system”. Former Binance employees and business partners describe @cz_binance as a divisive entrepreneur on a relentless drive to grow the exchange at all costs. https://www.ft.com/...
@adamsamson Adam Samson on x
Changpeng ‘CZ’ Zhao launched the boldest corporate raid in crypto's 14yr history when he threw fuel on a blaze already starting to engulf the empire of his chief rival, Sam Bankman-Fried. Here's this week's FT Person in the News by @joshckoliver and me: https://enterprise-sharing…

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