24 Nov 2022
Bybit has released a $100 million support fund aimed at institutional traders
Institutional trading firms have experienced losses in capital and hiccups in operations since the FTX collapse.
Exchange for crypto derivatives Bybit has started a new support fund to help institutional traders access liquidity after the FTX collapse, which caused a new wave of selling panic across the digital asset space.
Bybit announced on November 24 a $100 million relief fund for market makers and high-frequency trading institutions having trouble recovering from the FTX collapse earlier this month.
No interest will be charged on these funds when they are given out to qualified borrowers.
Institutional traders must participate on Bybit or another trading platform to qualify. The maximum amount granted to any applicant is $10 million, and all funds must be used for perpetual spot and Tether (USDT) trading on Bybit.
When a coordinated bank run revealed FTX to be insolvent on November 11, the company filed for Chapter 11 bankruptcy protection.
FTX had been the world's second-largest cryptocurrency exchange. When it was discovered that FTX CEO Sam Bankman-Fried had mixed company funds with those of Alameda Research, a sister company, an $8 billion hole appeared on FTX's balance sheet, and a scandal ensued.
According to Cointelegraph, FTX owes more than $3 billion to its 50 largest creditors.
As a result of FTX's demise, several companies exposed to it have reported severe cash flow and liquidity problems.
There has been a halt in the initiation of new loans by both Genesis Global Trading, backed by the Digital Currency Group, and Bitcoin (BTC) lender BlockFi, which is reportedly considering filing for bankruptcy.
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