In late 2022, shortly after the collapse of FTX exchange, Binance CEO Changpeng “CZ” Zhao devised a plan to “save” the cryptocurrency market. As reported by CriptoFácil, the plan included the creation of a $1 billion fund to help companies and protocols in the industry.
Initially, the plan had some success and Binance even expanded the fund’s reserves to $2 billion. However, in early 2023, the exchange itself began facing problems, causing the fund to lose resources. According to a Bloomberg report, it appears that Binance’s strategy failed.
The bear market ended up being worse for the community, with investors and companies losing billions in total. The Industry Recovery Initiative (IRI), the name of Binance’s plan, invested less than $30 million.
Bloomberg states that the IRI ultimately failed on all fronts. Out of the initial $1 billion, the IRI only invested $30 million in projects, which was far from covering investors’ withdrawals. Additionally, most struggling companies were unable to access the fund’s capital.
Another issue was that Binance also faced lawsuits in the US, particularly from the Securities and Exchange Commission (SEC), accusing the company of operating without a license. This diverted Binance’s focus to its defense, leading to the abandonment of the IRI.
The market faces significant challenges, with Operation Choke Point 2.0 and the SEC lawsuits against Binance, Coinbase, and other cryptocurrency companies adding to the difficulties. Despite their struggles, companies shifted their focus from recovering from the crisis to defending themselves against regulatory issues, lawsuits, and worsening macroeconomic conditions.
In March, CZ officially ended the IRI and its fund. The CEO announced that the remaining funds from the Initiative would be converted into Bitcoin (BTC), BNB, and Ether (ETH) to bolster Binance’s cash reserves, which had been shaken by bank collapses and the loss of stability in several stablecoins.
According to Etherscan data, the wallet linked to Binance’s IRI currently holds cryptocurrencies worth a meager $1,501. This suggests that the exchange has likely moved the funds elsewhere.
Overall, Binance’s attempts to save the cryptocurrency market through the IRI fell short, leaving the industry still grappling with challenges and uncertainties.