OKX reveals £84m ‘market recovery fund’ after rebuffing FTX rescue
OKX, the crypto exchange that rebuffed a rescue request from FTX, has announced a $100m (£84m) ‘market recovery fund’ today designed to support ailing firms on the verge of collapse.
The Seychelles-based exchange, which FTX begged for a bailout last week before striking a later-abandoned deal with Binance, said the new fund would be targeted at “high-quality projects” in the sector that are hit by sudden liquidity crises.
It marks the latest effort to shore up firms against future crises as the shockwaves of the FTX collapse reverberate across the industry. The biggest crypto bourse Binance announced a similar “industry recovery fund” earlier this week to steady firms against potential collapse.
OKX said the new fund would help firms deal with the immediate impact of the FTX crisis.
“Following recent developments in the market, a number of promising projects have encountered liquidity problems,” OKX said in a statement.
“Having been in the industry for almost a decade, healthy development for all projects and ecosystems is of utmost importance to OKX. The company will therefore provide resources and integration support to high-quality projects, alongside provision of technical, liquidity, and other necessary support.”
Fears of contagion in the crypto sector have spread due to the sprawling nature of FTX founder Sam Bankman-Fried’s sprawling crypto empire and the susceptibility of firms’ to runs on their assets.
The industry has already been rocked by a string of high profile crises this year including the collapse of the Terra Luna ecosystem, which saw almost its entire market value wiped out in the Spring, as well as the bankruptcy of crypto hedge fund Three Arrows Capital and digital asset lender Celsius.
Bitcoin, the most valuable cryptocurrency, has shed nearly 70 per cent of its value in the past 12 months and has plunged by over a quarter since the first signs of trouble at FTX began to emerge last weekend.