Following FTX’s aid to bankrupt crypto lenders BlockFi and Voyager, there have been suggestions that Binance may also announce some bailouts.
Binance finally broke the silence and addressed the situation.
The firm said that it is not in the mindset of aiding “bad” or failing cryptocurrency initiatives, including those with “misconceptions,” “badly handled” or “poorly organized” ventures. Binance stated in its most recent article that bailouts for such ventures are unnecessary and should not be protected.
The post claims not to keep terrible firms running. Although they should allow better undertakings to prove their worth, which they will do. During the current downturn in the market, there was a demand to sell crypto lending businesses due to heavy indebtedness.
However, Binance highlights some types of ventures that we should exclude. According to him, these projects are the ones that tend to commit to minor errors.
Explaining its points, Binance stated that these are now either overspending, there is insufficient savings, or there are other minor, fixable issues. At the same time the firm believes that such projects often have some positive characteristics. These are product-market fit, revenue generation in standard market conditions, strong business structure, competent teams, and so on.
SEC commissioner not in favor of bailout
Shortly after FTX announced a $250 million liquidity transfer to protect BlockFi, the crypto-friendly SEC commissioner stepped in. According to him, the latest market crisis is a common way of dividing the powerful from the poor. Letting things unfold slowly.
Peirce said in an interview with Forbes that there is no hedge in crypto […] She doesn’t like to claim that they will try to find a way to save them if they don’t have enough authority to do so.
However if it happens, she says that she will not want to use that power. This is because according to the commissioner, these things should be allowed to come out on their own. Crypto enthusiast Hester Peirce also said that the collapse could be a useful life lesson for industry players and executives.