Binance’s ambitious Industry Recovery Initiative (IRI), a project aimed at supporting the cryptocurrency industry following the collapse of the FTX exchange, has reportedly fallen short of its funding goals.
The IRI, spearheaded by Changpeng Zhao the CEO of Binance, was launched in November 2022 with the intention of raising at least $1 billion from industry giants to finance promising startups. However, recent reports suggest that the IRI has only managed to raise less than $30 million.
Despite the commitment of several billionaire companies, none have met Zhao’s expectations. Binance itself had committed $1 billion to the IRI project, but it has since moved $985 million of these funds back to its corporate treasury for investment.
The IRI Fund Failure Could Be Due to Binance’s Regulatory Struggles
The IRI was launched in response to the ‘crypto winter’ that followed the abrupt downfall of FTX, a then-prominent crypto exchange. The initiative aimed to reduce further cascading negative effects from FTX’s collapse and help projects facing a liquidity crisis.
However, amidst protracted crypto winter and ongoing regulatory struggles, even crypto giants have found it difficult to sustain their development and invest in the IRI project. Despite these setbacks, Binance has remained tight-lipped about the specifics of the IRI.
The company has not disclosed which entities benefited from the fund or provided details about the 14 projects it claims to have financed. This lack of transparency has led to questions about the effectiveness of the IRI and its ability to support the cryptocurrency industry.
In conclusion, while Binance’s Industry Recovery Initiative was launched with high hopes and ambitious goals, it appears to have fallen short of its objectives. The lack of funding and transparency around the initiative raises questions about its effectiveness and future prospects in supporting the cryptocurrency industry.
The cryptocurrency sector has faced challenges in attracting investment this year. Many companies, including Binance, have had to make substantial reductions in their workforce. Back in August, venture capital funding for cryptocurrency startups dropped to a level not seen in more than two years, falling below $500 million.