WEB3
by BSCN
October 11, 2023
Binance's shift in strategy may be due to a number of factors, including growing regulatory concerns surrounding stablecoins and the difficulty of identifying suitable projects to fund.
Summary
In the aftermath of the FTX collapse that threw the crypto industry in disarray, Binance turned savior, unveiling an ambitious Industry Recovery Initiative (IRI). The IRI aimed to “reduce further cascading negative effects of FTX” and provide essential support to the crypto industry during turbulent times. However, a recent Bloomberg report has raised questions about its effectiveness.
The IRI was officially announced in November 2022, with Binance pledging a staggering $1 billion in its BUSD (Binance USD) stablecoins to kickstart the initiative. However, as of October 10, 2023, it appears that the IRI may not have lived up to the initial hype. Binance had allocated $15 million in BUSD stablecoins, leaving a substantial $985 million untouched. Bloomberg reported that the remaining funds were repatriated to Binance's corporate treasury, signaling a shift in strategy amid growing regulatory concerns surrounding stablecoins.
Having disbursed less than $30 million to date, the IRI sought to provide support to crypto projects facing liquidity crises, attracting participation from 18 different entities, including Jump Crypto, DWP Labs, Animoca Brands, Aptos Labs, GSR, Kronos Research, Booker Group, and Polygon Labs, who together added an extra $100 million to the initiative.
Binance claimed in February that IRI have funded 14 projects, with another 57 in due diligence. However, Binance did not disclose the funded projects, with the exception of South Korean crypto exchange GOPAX.
Notable among the IRI participants, DWF Labs reportedly deployed only $2 million out of its $15 million IRI commitment. Aptos Labs, on the other hand invested "more than" the $5 million it committed. The remaining participants either failed to deploy any funds or could not be identified, as reported by Bloomberg.
"We didn't identify many projects who would meet our criteria, and this is the same for the other investors," said Dana Hou, Binance Labs' business strategy lead, in a statement to Bloomberg.
According a recent Messari report on the State of Crypto Fundraising Q3, the third quarter of 2023 witnessed a significant downturn, marking new lows in both total funding amounts and deal counts, reminiscent of the levels last observed in Q4 of 2020.
The future of the Initial Recovery Initiative's involvement in supporting crypto projects remains uncertain, however, its Google Docs applicant form continues to remain open.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCN. The information provided in this article is for educational and entertainment purposes only and should not be construed as investment advice, or advice of any kind. BSCN assumes no responsibility for any investment decisions made based on the information provided in this article. If you believe that the article should be amended, please reach out to the BSCN team by emailing [email protected].
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