Binance CEO CZ seeks money for industry recovery fund from Abu Dhabi investors after FTX collapse

FTX's collapse was triggered by the sudden dumping of FTT tokens at the hands of Binance, the world’s biggest exchange by trading volume, which later attempted to rescue Sam Bankman-Fried’s exchange by acquiring it. However, following the failure to do so, Binance came forward with the industry recovery fund, urging other players in the space to contribute as well. Binance's CEO, Changpeng Zhao (CZ), is attempting to strengthen this fund by finding investors in the Middle East.

FTX's downfall created a liquidity crisis

FTX itself faced an $8 billion liquidity crunch, but the exchange's undoing impacted multiple other projects in the crypto space as well. As reported by FXStreet, CZ initiated the industry recovery fund to rescue only fundamentally strong projects that are suffering liquidity crises.

According to Bloomberg, CZ's devotion to bringing this fund to life led the executive to Abu Dhabi. Zhao reportedly conducted meetings in the United Arab Emirates (UAE) to find potential backers for the said fund. These backers included entities affiliated with UAE's National Security Adviser, Sheikh Tahnoon Bin Zayed.

Although the fund was not the only matter of discussion, the report also highlighted dialogue about regulatory concerns. A Binance spokesperson stated,

"CZ's meetings in Abu Dhabi were all focused on general global regulatory matters – specifically how Middle Eastern regulators could lead the globe by exploring more aggressive proof of custody requirements for crypto exchanges."

CZ has been pretty reactive to FTX's collapse as the executive lived up to his word of providing the Proof of Reserves for Binance. Data from CoinMarketCap shows that the world's biggest exchange currently holds more than $66.68 billion in financial reserves, with BUSD making up 33.4% of it.

Binance’s Reserves

Binance Coin reacts positively

In the hours following the revelation of CZ's visit to the Middle East, Binance's native token, Binance Coin, spiked by 3.7%. Trading at $263, Binance Coin price faces critical resistance. 

Closing above the $263 zone would prepare Binance Coin price for an upswing toward its next resistance at $274. Flipping this level into support could enable BNB to climb and tag $290.

BNB/USD 4-hour chart

Although traders must be wary of the high volatility in the crypto market, which could invalidate the bullish case. If Binance Coin price were to trickle down, it could end up tagging its critical support at $249 for the second time in a week. A further decline below this level would invalidate the bullish thesis and result in the exchange token crashing by 11% to four-month lows around $234.9.