Binance Founder’s $1 Billion Plan Ends in Mystery! — What Really Happened?
In the wake of the FTX exchange collapse, Binance, a major player in the cryptocurrency space, took a bold step by initiating the Industry Recovery Initiative (IRI). This co-investment project aimed to breathe life back into the cryptocurrency industry, which had been shaken by the FTX incident. However, recent reports suggest that the IRI may not have lived up to its potential. In this article, we delve into the details of this initiative, its expenditures, and the lingering questions about its effectiveness.
Binance’s Commitment:
In November 2022, Binance unveiled its ambitious plan to allocate a staggering $1.1 billion towards saving the crypto industry. Out of this massive commitment, $15 million was initially spent in the form of BUSD (Binance’s stablecoin). This marked only a mere 2.7% of the total promised support as Bloomberg reported on Oct. 10.
Allocation Strategy:
Curiously, Binance made a strategic move by returning the remaining $985 million of pledged BUSD back to its corporate treasury. The intention was to repurpose these funds for future investments.
In March, Binance converted these treasury funds into various cryptocurrencies, including Bitcoin, as concerns over the regulatory landscape for stablecoins continued to grow.
Additional Contributions:
Apart from Binance, the IRI received an additional $100 million in contributions from 18 different organizations by February 2023. Notable contributors included Animoca Brands, Aptos Labs, Jump Crypto, and Polygon Ventures, among others.
Who received IRI funding, and why the secrecy?
Despite claims that the IRI funded 14 projects within three months of its launch, Binance did not disclose the names of the beneficiary companies. The only publicly declared expense from Binance’s $1 billion IRI commitment was its acquisition of the South Korean crypto exchange, Gopax, announced in early February.
Is the IRI fulfilling its commitment to cryptocurrency projects?
An analysis of wallet data collected by Bloomberg reveals that the IRI has invested less than $30 million since its inception in the previous year. Among the nine named participants, only DWF Labs and Binance-backed Aptos Labs have shown signs of deploying some of the committed funds. The fate of the remaining funds remains uncertain, raising questions about the IRI’s current status and its commitment to supporting cryptocurrency projects.
Ongoing Mystery
As of now, it is unclear whether the IRI is actively working to support cryptocurrency projects. The Google Docs applicant form for the initiative is still active, adding to the mystery surrounding its operations.
What actually the Crypto Industry Needs?
The Industry Recovery Initiative (IRI) made big commitments of capital, but in reality, they’ve only deployed a fraction of it. This situation comes at a critical time when the cryptocurrency industry is facing a pressing need for funding.
According to a report by blockchain analytics firm Messari, cryptocurrency-related venture funding has plunged by as much as 70% since Q3 2022. In Q3 2023, crypto VC volumes amounted to a mere $2 billion, a stark contrast to the record-high of $17 billion in the first quarter of 2021.
Binance’s Industry Recovery Initiative set out with grand ambitions to bolster the cryptocurrency industry post-FTX collapse. However, questions persist about its effectiveness and transparency, particularly regarding the allocation of funds. As the crypto industry grapples with a significant funding drought, the role and impact of initiatives like the IRI remain under scrutiny, leaving many to wonder if they will truly be the lifeline the industry needs.
