A new report suggests that the Industry Recovery Initiative (IRI) launched by Binance may not have been as effective as desired. The IRI was created to support the cryptocurrency industry following the collapse of FTX. Binance initially announced the initiative in November 2022 and committed $1 billion in BUSD stablecoins, with $15 million already spent. However, Bloomberg reported on October 10th that the IRI had quietly fizzled out.
Binance decided to move the remaining $985 million of pledged BUSD back to its corporate treasury and planned to use it for investments. In March, Binance converted these funds from BUSD to cryptocurrencies like Bitcoin (BTC) due to growing regulatory concerns around stablecoins.
Aside from Binance, the IRI had also collected an additional $100 million in contributions from 18 organizations by February 2023. These organizations included Animoca Brands, Aptos Labs, Jump Crypto, and Polygon Ventures. Together, the IRI claimed to have funded 14 projects within three months of its launch. However, Binance did not disclose the names of the companies that received funding, with the only publicly declared expense being Binance’s acquisition of the South Korean crypto exchange Gopax announced in February.
According to wallet data analyzed by Bloomberg, the IRI has invested less than $30 million since its inception. Among the nine named participants, only DWF Labs and Binance-backed Aptos had spent at least some of the committed funds. This suggests that the IRI has not been able to effectively distribute its capital commitments.
It remains unclear whether the IRI is still active in supporting cryptocurrency projects, as its applicant form on Google Docs is still open. When contacted for comment, Binance did not immediately respond.
The lack of significant contributions from the IRI comes amid a challenging funding landscape for the cryptocurrency industry. According to blockchain analytics firm Messari, cryptocurrency-related venture funding has plummeted by as much as 70% from Q3 2022. In Q3 2023, the funding volume amounted to just around $2 billion, significantly down from the all-time high of $17 billion in Q1 2021.
As the industry continues to grapple with funding limitations, the fate of initiatives like the IRI becomes crucial in providing support and investment opportunities. Binance’s efforts to rejuvenate the industry through the IRI have faced obstacles, raising questions about the effectiveness of such initiatives in the future.
Overall, while the IRI initially held promise as a means of supporting the cryptocurrency industry, its actual impact has been limited. The failure to fully utilize the committed funds raises concerns about the effectiveness of such initiatives and highlights the challenges faced by the industry in securing adequate funding for growth and development.