After cryptocurrency exchange FTX extended a helping hand to troubled crypto lender BlockFi and Voyager, there have been rumors that BINANCE might announce some bailouts too considering its healthy cash reserves. However, Binance has finally broken the silence and clarified the entire thing.
The company said that it is in no mood to support “bad” and failed crypto projects. This includes projects that are “poorly designed”, “poorly managed”, or “poorly operated”. In its latest blog post, Binance said that bailouts to such projects don’t make sense and they should not be protected.
“Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will,” it notes. Crypto lending firms have had a massive overleverage and were forced to liquidate during the recent market downfall.
But Binance explains another category of projects deserving a bailout. As per Binance, these are projects that made small mistakes. Explaining this project types, Binance:
They are either too aggressive on spending, have insufficient reserves, or have other minor fixable problems. These projects usually have some good qualities: product-market fit, generating revenue in normal market conditions, sound business models, decent teams, etc.