Beyond Binance’s own commitment, the IRI garnered an additional $100 million in contributions from 18 organizations by February 2023.
A recent report from Bloomberg suggests that the $1 billion Industry Recovery Initiative (IRI), launched by Binance has fallen short of expectations, with only 2.7% of the committed funds deployed.
The Industry Recovery Initiative was first announced by Binance in November 2022 as a beacon of hope for the industry following the collapse of the defunct FTX Derivatives Exchange. With a commitment of $1 billion in BUSD, Binance aimed to bolster a sector struggling with regulatory challenges and market turbulence. Binance’s efforts were commendable, and the IRI quickly garnered attention and support.
Three months after its launch, Binance claimed to have funded 14 projects through the IRI, although the specific names of these companies were not disclosed. However, the only publicly known expense from the IRI’s $1 billion commitment was Binance’s acquisition of the South Korean crypto exchange Gopax, announced in early February.
According to wallet data analyzed by Bloomberg, the IRI has invested less than $30 million since its inception. Among the nine named participants, only DWF Labs and Binance-backed Aptos had spent at least some of the committed funds. The fate of the remaining funds remains uncertain, as the Google Docs applicant form for the IRI is still active, and Binance has not provided a statement regarding its current status.
Meanwhile, the IRI’s struggles come at a time when the crypto industry is desperately seeking funding. An earlier report from Coinspeaker revealed that in Q3 2023, crypto VC volumes amounted to just around $2 billion, a significant decline from the all-time high of $17 billion seen in Q1 2021.
The IRI’s Initial Promise
As the FTX exchange crumbled, the crypto industry plunged into turmoil. Prices plummeted, investors scrambled to mitigate their losses, and startup funding seemed to dry up. In this dire situation, Binance’s CEO, Changpeng ‘CZ’ Zhao, stepped in with the Industry Recovery Initiative.
Beyond Binance’s own commitment, the IRI garnered an additional $100 million in contributions from 18 organizations by February 2023, including notable names like Animoca Brands, Aptos Labs, Jump Crypto, and Polygon Ventures, among others.
The project was poised to be a beacon of hope, not just for Binance but for the entire crypto ecosystem. The $1 billion commitment seemed like a lifeline for projects and businesses affected by the FTX collapse, signaling Binance’s commitment to supporting the ecosystem.
Shortly after the announcement, Binance made its first move by allocating $15 million in BUSD from the pledged $1 billion. While this was a welcome step, many wondered why the exchange had not released a more substantial portion of the funds. Nonetheless, it was seen as a positive development, and the community eagerly awaited further investments.
The IRI took an unexpected turn when, in a surprising move, Binance decided to move the remaining $985 million of the pledged BUSD back to its corporate treasury. The rationale behind this decision was to repurpose the funds for other investments.
In March, Binance made another significant decision by converting these funds from BUSD to cryptocurrencies like Bitcoin, citing growing regulatory concerns surrounding stablecoins.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
