Crypto exchange OKX plans to launch a $100 million ecological support fund for crypto projects suffering from liquidity issues due to FTX’s bankruptcy saga.
OKX to Roll Out $100M Support Plan
According to a Twitter update, OKX will work with OKX chain (OKC) to launch the ecological support plan for projects affected by the crypto winter intensified by FTX’s ignoble end.
“Under the influence of recent emergencies, some ecological high-quality projects have problems such as liquidity. In order to promote the healthy development of the industry ecology, Ouyi will help high-quality project parties to migrate smoothly, and provide ecological/technical/liquidity support to eligible project parties to overcome the difficulties together,” the exchange wrote.
Recall that crypto exchange FTX filed for voluntary Chapter 11 bankruptcy protection on Friday after failing to fix its liquidity issue. Subsequent reports have revealed that the crash stemmed from the firm’s mishandling of users’ funds. The collapse is one of the biggest in crypto, as many entities have deep ties to the exchange.
Crypto Saving Expert reported that data from Crypto Fund Research revealed that 25% to 40% of crypto hedge funds and venture capital funds were exposed to either the FTX token (FTT) or the exchange itself.
Crypto Fund Research CEO Josh Gnaizda believes the crash could affect more funds, totalling losses between $1 billion and $5 billion.
Furthermore, entities such as Paradigm, Sequoia Capital, Singapore’s Temasek, Galaxy Digital, and Ontario Teachers Pension Plan (OTPP) have declared exposure to FTX.
Not The First
OKX’s plan to launch a support project for struggling crypto firms is not the first of its kind. Yesterday, Changpeng Zhao (CZ), the CEO of crypto exchange Binance, announced that his firm would launch an industry recovery fund to support “projects who are otherwise strong, but in a liquidity crisis.”
CZ asked interested firms to reach out to Binance Labs and urged industry players with cash to co-invest.
(By William A. Frederick)