Binance, the world’s largest crypto exchange based on daily trade volumes, announced a $1 Bn fund to invest in companies that work to support the future of crypto technology in hopes of cleaning out the crypto scams. Ella Zhang, the head of the exchange’s incubator program Binance Labs, presented the initiative, named “Social Impact Fund”. It will be administered through Binance Labs and is to use Binance’s BNB tokens only as an investment vehicle. Binance will pour in the $1 Bn over 10 phases of $100 M each and will create a combination of a “fund of funds” and a direct fund that invests in blockchain projects. The “fund of funds” would make investments in 20 funds that have managed $100 M in assets.
Binance launches the Social Impact Fund together with funding another important initiative – the “Cryptocurrency Governance Initiative” (CGI) focused on developing a framework that encourages self-regulation and combating scams in the industry.
The fund is to be invested in projects that focus on public blockchains, decentralized exchanges, custody/payments/wallet, stable digital currency, and compliant alternative trading systems or security token platforms. Any project that accepts money from the fund will have to join their CGI and any team that fails to uphold their commitments will have their tokens delisted from the exchange and investment pulled.
This is not Binance’s first run at investment; it already invested via its Labs division, which was unveiled earlier this year, in MobileCoin, a mobile payments start-up, smart contract start-up Oasis Labs, verification service Certik, and crowdfunding platform Republic.
This initiative is another example of a major crypto company using its wealth to become an investor and grow its platform through deals with younger companies, such as the Ethereum Community Fund, Ripple’s Xpring initiative and EOS-creator Block One’s $1 Bn commitment.
