Changpeng Zhao, the CEO of the cryptocurrency exchange Binance, pledged to become the messiah of the crypto ecosystem through the Industry Recovery Initiative (IRI). It has nearly been 11 months since the promise, but the IRI has utilized only 3% of the committed amount.

The crypto industry has been running out of funding amid the bear market that has been going on for almost two years now. But is Binance now backing away from its promise to invest $1 billion in troubled crypto firms?

According to Bloomberg, the IRI has deployed only $30 million in total. The world’s largest crypto exchange, Binance, committed to invest $1 billion but has instead only spent $15 million.

In February 2023, Binance used the $15 million to acquire a majority stake in the South Korean crypto exchange Gopax. The deal, which could open the gates of the South Korean market for Binance, is awaiting regulatory approval.

A Binance spokesperson told Bloomberg that the company moved the remaining $985 million back to its corporate treasury. The on-chain data confirms that Binance first transferred the funds to a depositor wallet 0xco97. And then, from 0xco97, the company moved the funds to its Binance 14 hot wallet. 

Read more: Hot Wallets vs. Cold Wallets: What’s the Difference?

Dana Hou, a Binance Labs executive, explained:

“We didn’t identify as many projects who would meet our criteria, and this is the same for the other investors.”

Jump Crypto, the firm with the second-highest commitment of $25 million, has yet to invest any amount. Whereas DWF Lab, the company that pledged $15 million for the Industry Recovery Initiative, spent $2 million and withdrew the remaining amount from the IRI wallet.

Out of the eight companies listed in the screenshot below, at least five have made zero investments. Only Aptos Labs has fulfilled its commitment of investing $5 million in the crypto firms with liquidity crises. 

Lastly, there’s only $32 million left in the public wallets of the Industry Recovery Initiative. The screenshot below shows that most of the funds have been withdrawn by the crypto companies.

On 14 Nov. 2022, Changpeng Zhao announced the IRI “to help projects who are otherwise strong but in a liquidity crisis.” He also welcomed other crypto companies to join the initiative. Zhao told Bloomberg last year that “The industry needs saving now, not in 2023.” However, it is the fourth quarter of 2023, but Zhao has yet to “save the industry.”

There is frustration among community members due to minimum follow-ups on the status of the amount pledged by the companies. Clara Medalie, director of research at blockchain analytics firm Kaiko, said:

“It’s a matter of accountability, and there wasn’t much of that for this recovery fund,”

A community member wrote on X (Twitter):

“So many red flags about Binance recently.

Everything seems to point to them being broke while putting on the illusion of strength.

Only deployed less than $30m out of a $1 billion “recovery fund”. Not even a generous act on their behalf; they were planning to scoop up companies for pennies on the dollar.”

Read more: 7 Best Binance Alternatives in 2023

Do you have anything to say about Binance Industry Recovery Initiative (IRI) or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTok, Facebook, or X (Twitter).

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The post Why Binance’s $1 Billion Recovery Fund Is Now Worth Just $32 Million appeared first on BeInCrypto.

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