Bybit, the crypto derivatives exchange, has launched a new support fund to help institutional traders access liquidity in the wake of the FTX collapse, an event that triggered a fresh wave of panic selling across the digital asset space.
It has been reported that the support fund, valued at $100 million, is available to market makers and high-frequency trading institutions struggling with financial or operational difficulties following the collapse of FTX earlier this month, Bybit disclosed on November 24. The funds will be distributed to eligible applicants at a 0% interest rate.
However, to be eligible, institutional traders must be active on Bybit or other exchanges. The maximum amount distributed per applicant is $10 million and the funds must be used for spot and Tether perpetual trading on Bybit. Once the second-largest cryptocurrency exchange in the world, FTX filed for Chapter 11 bankruptcy on November 11 after a bank run exposed the firm for being insolvent.
The report said that a scandal ensued after it became apparent that CEO Sam Bankman-Fried was comingling funds between FTX and sister firm Alameda Research, which resulted in an $8 billion hole in FTX’s balance sheet.
Thus, as reported, FTX’s 50 largest creditors are owed more than $3 billion. Several companies exposed to FTX have reported financial and liquidity constraints due to its collapse. Bitcoin lender BlockFi is considering bankruptcy, while the Digital Currency Group-backed Genesis Global Trading recently halted new loan originations.
Source: Cointelegraph
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