Binance Industry Recovery Initiative (IRI), an ambitious co-investment project aimed at revitalizing the cryptocurrency industry after the FTX collapse, is now facing scrutiny regarding its effectiveness. A recent report has shed light on questionable outcomes linked to the initiative.
Launched in Nov 2022, the IRI gained attention for its initial commitment of $1 billion in BUSD (Binance USD) stablecoins. However, a report by Bloomberg on Oct 10 revealed that Binance has only allocated a meager $15 million from their pledged BUSD funds to support the initiative.
Binance transferred the remaining $985 million of pledged BUSD back into its corporate treasury. The purpose behind this action was to reallocate the funds for other strategic investments. Moreover, in March, Binance expanded its portfolio by converting these funds from BUSD to cryptocurrencies like Bitcoin, citing growing regulatory concerns related to stablecoins.
Binance’s commitment, though falling short of expectations, resulted in the IRI securing an additional $100 million in contributions from 18 organizations by the end of Feb 2023. Notable contributors included Animoca Brands, Aptos Labs, Jump Crypto, and Polygon Ventures.
However, Binance announced its funding of 14 projects through the IRI three months after launching, yet the identities of these beneficiary companies remain undisclosed. The only known expense from Binance’s $1 billion IRI commitment was its acquisition of the South Korean crypto exchange Gopax, publicly disclosed in early Feb.
IRI’s Crypto Projects Shrouded In Mystery As Binance Stays Mum
According to Bloomberg’s analysis of wallet data, 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 have utilized some of their committed funds.
However, the current status of the International Research Institute’s (IRI) support for cryptocurrency projects is yet to be determined. This uncertainty arises from the continued activity of its Google Docs applicant form.
Furthermore, in the urgent pursuit of funding within the cryptocurrency industry, the IRI’s significant capital pledges starkly juxtapose with its modest actual contributions.
The funding landscape in the cryptocurrency industry is proving to be quite challenging. According to recent data from the blockchain analytics firm Messari, quarterly venture funding specifically for cryptocurrencies has experienced a staggering 70% decline since Q3 2022. In Q3 2023, crypto VC volumes reached a mere $2 billion, which starkly contrasts with the remarkable all-time high of $17 billion recorded in Q1 2021.
The crypto industry is currently facing funding challenges. As a result, there is increased scrutiny towards initiatives like Binance’s IRI, and the importance of continued investment in this rapidly evolving sector cannot be overstated.
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