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Binance remains silent regarding initiatives supported by $1 billion cryptocurrency recovery fund.
The Industry Recovery Initiative (IRI), led by Binance, is a co-investment endeavor designed to bolster the cryptocurrency sector following the FTX collapse, but a recent report indicates it may not have achieved its intended effectiveness.
Following the announcement of the IRI in November 2022, Binance allocated $15 million in its BUSD (BUSD) stablecoins from a total commitment of $1 billion in BUSD, as reported by Bloomberg on Oct. 10.
Subsequently, Binance transferred the remaining $985 million of the committed BUSD back to its corporate treasury, with plans to utilize it for investments. In March, Binance converted these assets from BUSD to cryptocurrencies such as Bitcoin (BTC), citing increasing regulatory apprehensions regarding stablecoins.
In addition to Binance, the IRI had garnered an extra $100 million in contributions from 18 entities by the end of February 2023, including Animoca Brands, Aptos Labs, Jump Crypto, Polygon Ventures, among others.
Three months post-launch, Binance asserted that the IRI had financed 14 projects, although it did not reveal the identities of the companies that received funding. The only publicly acknowledged expenditure from Binance’s $1 billion IRI commitment was the acquisition of the South Korean crypto exchange Gopax, which was announced in early February.
As per wallet data compiled by Bloomberg, the IRI has invested less than $30 million since its launch last year. Among the nine identified participants, only DWF Labs and Binance-supported Aptos had utilized at least a portion of the committed funds.
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The current status of the IRI’s efforts to assist cryptocurrency projects remains uncertain, as its Google Docs application form is still operational.
Binance did not provide an immediate response to Cointelegraph’s inquiry for comment.
Transactions associated with Binance-spearheaded Industry Recovery Initiative as of Oct. 9, 2023. Source: Bloomberg
The disparity between the IRI’s substantial capital commitments and its actual contributions arises as the cryptocurrency sector seeks funding.
The quarterly volume of venture funding related to cryptocurrency has decreased by as much as 70% since Q3 2022, according to a report from blockchain analytics firm Messari on Oct. 5. The report noted that crypto VC volumes in Q3 2023 totaled approximately $2 billion, a significant drop from the peak of $17 billion in Q1 2021.
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