May 29, 2024
Binance's Industry Recovery Initiative aftermath post-FTX collapse
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Binance’s IRI Falls Short of Expectations: $1 Billion Commitment Under Review

The Industry Recovery Initiative (IRI), led by Binance to assist the cryptocurrency sector following the FTX collapse, may not have achieved its intended effectiveness, as indicated in a recent report.

In November 2022, Binance unveiled the IRI and initially allocated $15 million in its BUSD stablecoins, out of a total commitment of $1 billion in BUSD. As of October 10, Bloomberg reported that Binance had moved the remaining $985 million of the promised BUSD back into its corporate treasury, intending to employ it for investments. In March, citing mounting regulatory concerns regarding stablecoins, Binance converted these funds into cryptocurrencies, including Bitcoin.

Aside from Binance, 18 other organizations, including Animoca Brands, Aptos Labs, Jump Crypto, Polygon Ventures, and others, contributed an additional $100 million to the IRI by February 2023.

Binance claimed to have funded 14 projects within three months of the IRI’s launch but did not disclose the names of the recipient companies. The sole publicly declared expenditure from Binance’s $1 billion IRI commitment was the acquisition of the South Korean crypto exchange Gopax, which was announced in early February.

According to wallet data analyzed by Bloomberg, the IRI has invested less than $30 million since its inception in the previous year. Of the nine identified participants, only DWF Labs and Binance-supported Aptos had disbursed at least a portion of their committed funds. It remains uncertain whether the IRI is actively supporting cryptocurrency projects, as its Google Docs applicant form is still available. The disparity between the IRI’s substantial capital commitments and its actual contributions has emerged as the cryptocurrency industry faces challenges in securing funding.

Blockchain analytics firm Messari reported a quarterly decline of up to 70% in cryptocurrency-related venture funding in Q3 2022. According to the report, crypto VC volumes in Q3 2023 totaled approximately $2 billion, down significantly from the peak of $17 billion recorded in Q1 2021.

Image by freepik

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