Binance tight-lipped on projects funded by $1B crypto recovery fund

The IRI’s Promise: A Billion-Dollar Commitment
A Meager Disbursement: Only $15 Million Deployed
Binance’s Treasury Shift: Redirecting the Unspent Funds
Regulatory Concerns: A Shift from BUSD to Cryptocurrencies
Additional Contributions: Support from 18 Organizations
Unseen Beneficiaries: Secrecy Shrouds Fund Allocation
Partial Spending: Who Benefited?

The cryptocurrency industry has been grappling with a prolonged bear market, with many firms facing financial hardships. In the midst of this challenging landscape, Binance, one of the world’s largest cryptocurrency exchanges, unveiled its Industry Recovery Initiative (IRI) as a co-investment project. The IRI was touted as a much-needed lifeline to revive struggling cryptocurrency companies, particularly in the wake of the FTX exchange collapse. However, recent findings suggest that the impact of the IRI may have fallen short of expectations.

The IRI’s Promise: A Billion-Dollar Commitment

Binance’s IRI was officially introduced in November 2022, with a high-profile commitment to allocate $1 billion in Binance USD (BUSD) stablecoins. This announcement drew considerable attention and garnered hopes of a revival within the crypto industry. The IRI was envisioned as a financial boost for cryptocurrency companies facing financial adversity.

A Meager Disbursement: Only $15 Million Deployed

Recent reports by Bloomberg indicate that the reality of the IRI’s utilization falls significantly short of its promise. Instead of deploying a substantial portion of the pledged billion dollars, the IRI has only disbursed a modest $15 million as of October 10. This revelation has raised questions about the adequacy and effectiveness of the initiative in delivering the desired impact to the crypto industry.

Binance’s Treasury Shift: Redirecting the Unspent Funds

One of the pivotal moments in the IRI’s journey was Binance’s decision to redirect a significant portion of the pledged funds back to its corporate treasury. While $15 million was allocated for the acquisition of a majority stake in the South Korean crypto exchange, Gopax, the remaining $985 million was earmarked for repatriation to Binance’s corporate treasury. The move to reallocate these unspent funds has raised questions within the crypto community about the original intent and commitment behind the IRI.

Regulatory Concerns: A Shift from BUSD to Cryptocurrencies

In March, against the backdrop of growing regulatory concerns surrounding stablecoins, Binance opted to convert the IRI’s remaining $985 million from Binance USD (BUSD) to cryptocurrencies, including Bitcoin (BTC). This strategic move aligns with Binance’s need to adapt to the evolving regulatory landscape and address concerns surrounding stablecoin operations. The shift has added complexity to the IRI’s utilization and deployment.

Additional Contributions: Support from 18 Organizations

In addition to Binance’s commitment, the IRI secured an additional $100 million in contributions from 18 organizations by the end of February 2023. These organizations included prominent names in the crypto industry such as Animoca Brands, Aptos Labs, Jump Crypto, and Polygon Ventures. The support from these entities added weight to the IRI’s mission.

Unseen Beneficiaries: Secrecy Shrouds Fund Allocation

Three months after its launch, Binance claimed that the IRI had financed 14 projects. However, what remains shrouded in mystery is the identity of these projects and the companies that have benefited from the IRI. The lack of transparency regarding the recipients of IRI funds has left the crypto community curious and, in some cases, skeptical.

Partial Spending: Who Benefited?

Detailed examination of wallet data by Bloomberg reveals that the IRI has spent less than $30 million since its inception in the previous year. Among the nine identified participants, only DWF Labs and Binance-backed Aptos have spent a portion of the committed funds. This partial spending adds a layer of complexity to the narrative, making it unclear how the remaining funds will be deployed.