Cryptocurrency exchange Binance’s ambitious Industry Recovery Initiative (IRI) was launched to provide a much-needed lifeline to the crypto industry following the FTX collapse. However, recent reports suggest that the fund hasn’t been as active as expected. This blog will delve into the details of the IRI, its working, funding status, and the mystery surrounding the beneficiaries.
About the Industry Recovery Initiative (IRI)
The IRI was announced in November 2022, with a staggering commitment of $1 billion in Binance USD (BUSD) stablecoins. However, only $15 million of this commitment has been spent in BUSD, leaving $985 million in limbo. Binance converted these funds into cryptocurrencies like Bitcoin due to growing regulatory concerns around stablecoins.
In addition to Binance’s contribution, the IRI gathered an extra $100 million from 18 organizations, including Animoca Brands, Aptos Labs, Jump Crypto, Polygon Ventures, and more. Although Binance claimed to have funded 14 projects three months after the IRI launch, they have yet to disclose the names of these beneficiaries. The only publicly known expenditure was Binance’s acquisition of South Korean crypto exchange Gopax.
Wallet data collected by Bloomberg reveals that the IRI has invested less than $30 million since its inception. Out of the nine named participants, only DWF Labs and Binance-backed Aptos Labs had utilized some of the committed funds.
As of now, the IRI’s current status remains uncertain, as its Google Docs applicant form is still active. Binance has not provided further information on its ongoing projects or funding allocations.
The Funding Situation
The IRI’s significant capital commitment compared to its actual contributions raises questions about where the money is going. The cryptocurrency industry is in dire need of financial support, as evidenced by a 70% decrease in cryptocurrency-related venture funding from Q3 2022 to Q3 2023. According to Messari, crypto VC volumes in Q3 2023 reached just around $2 billion, down from an all-time high of $17 billion in Q1 2021.
Binance‘s Industry Recovery Initiative had grand intentions to revive the cryptocurrency industry after the FTX collapse. However, its actual impact remains uncertain due to the lack of transparency regarding project funding. As the crypto community continues to seek financial support, clarity and accountability are essential to ensure the effective use of such substantial funds.
1. What is the Industry Recovery Initiative (IRI)?
The Industry Recovery Initiative (IRI) is a project spearheaded by Binance, one of the world’s largest cryptocurrency exchanges. It was launched to provide financial support to the cryptocurrency industry in the aftermath of the FTX collapse. Binance committed $1 billion to the IRI in Binance USD (BUSD) stablecoins.
2. How much of the $1 billion IRI commitment has been spent so far?
Out of the $1 billion committed to the IRI, only $15 million has been spent in BUSD, while the remaining $985 million was converted into cryptocurrencies like Bitcoin due to regulatory concerns. This raises questions about the utilization of the remaining funds.
3. Have the beneficiaries of the IRI been disclosed?
Binance has funded 14 projects through the IRI but has not disclosed the names of the companies that received funding. The lack of transparency has raised concerns about the accountability and impact of the IRI on the cryptocurrency industry.