After cryptocurrency exchange FTX extended a helping hand to troubled crypto lenders BlockFi and Voyager, there are rumors that Binance may also announce a bailout.
However, Binance has stated that it does not intend to support failed crypto projects. These include those that are “poorly designed,” “poorly managed,” or “poorly operated.” In its blog, the crypto exchange explained that helping such projects does not make sense, and they should not be protected.
Don’t perpetuate bad companies. Allow them to fail. Let other, better projects take their place. And they will definitely come.
However, Binance notes another category of projects that deserve to be saved. According to the crypto exchange, these are projects that made small mistakes.
For example, they spend too quickly, or have insufficient reserves, or have other small problems that can be fixed. These projects usually have some good qualities: product-market fit, revenue generation in normal market conditions, reliable business models, decent teams, and so on.
Securities and Exchange Commission Commissioner Hester Peirce also opposes bailouts of failed companies. Shortly after FTX announced an injection of $250 million in liquidity to rescue BlockFi, the crypto-friendly SEC commissioner spoke out against it. She said the recent market crash is a natural process of weeding out strong companies from weak ones.