Binance's ambitious Industry Recovery Initiative (IRI) was launched to provide a crucial lifeline to the crypto industry in the aftermath of the FTX collapse. However, recent reports indicate that the fund's activity has fallen short of expectations. This blog will delve into the intricacies of the IRI, its operational dynamics, funding status, and the enigma surrounding its beneficiaries.
About the Industry Recovery Initiative (IRI) The IRI was unveiled in November 2022, pledging a substantial $1 billion in Binance USD (BUSD) stablecoins. Despite this commitment, only $15 million has been expended in BUSD, leaving $985 million in a state of uncertainty. Due to escalating regulatory concerns surrounding stablecoins, Binance converted these funds into cryptocurrencies like Bitcoin.
In addition to Binance's contribution, the IRI garnered an additional $100 million from 18 organizations, including Animoca Brands, Aptos Labs, Jump Crypto, Polygon Ventures, and more. Although Binance claimed to have supported 14 projects three months after the IRI launch, the identities of these beneficiaries are yet to be disclosed. The sole publicly known expenditure was Binance's acquisition of the South Korean crypto exchange Gopax.
Bloomberg's analysis of wallet data reveals that the IRI has invested less than $30 million since its inception. Among the nine named participants, only DWF Labs and Binance-backed Aptos Labs have utilized some of the committed funds.
As of now, the IRI's current status remains uncertain, with its Google Docs applicant form still active. Binance has not offered additional details regarding ongoing projects or funding allocations.
The Funding Situation The stark contrast between the IRI's substantial capital commitment and its actual contributions raises questions about the fund's utilization. The cryptocurrency industry is in urgent need of financial support, evident in a 70% decrease in cryptocurrency-related venture funding from Q3 2022 to Q3 2023. According to Messari, crypto VC volumes in Q3 2023 reached approximately $2 billion, down from an all-time high of $17 billion in Q1 2021.
