Binance Commits USD One Billion to the Crypto Industry Recovery Fund

Binance Commits USD One Billion to the Crypto Industry Recovery Fund

Binance has committed USD one billion to a crypto industry recovery initiative to restore confidence among investors following the collapse of crypto exchange FTX. A number of crypto companies have joined Binance’s efforts with commitments to the recovery fund.

The Industry Recovery Initiative (IRI) Launched

Global cryptocurrency exchange Binance announced the launch of the Industry Recovery Initiative (IRI), which the company described as "a new co-investment opportunity for organizations eager to support the future of Web3."

The announcement states, "Initially, Binance will commit USD one billion to IRI-themed investment opportunities with an intent to ramp up that amount to USD 2 billion if the need arises."

"So far, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have also committed to participating with an initial aggregate commitment of around USD 50 million, and we expect more participants to join soon," Binance added. Each participant has set aside committed capital in stablecoins or other tokens. 

Innovation and Long-Term Value Creation Key to Funding

Binance explained that it will be looking for projects characterized by "innovation and long-term value creation," "a delineated and viable business model," and "a laser focus on risk management." The global crypto exchange said:

"What makes this initiative unique is the collaborative approach to restoring confidence in Web3."

The CEO of Binance, Changpeng Zhao (CZ), first revealed that his company is setting up a crypto industry recovery fund last week. The executive explained at the time that the purpose of the recovery fund is "to reduce further cascading negative effects of FTX" by helping projects that "are otherwise strong but in a liquidity crisis."

FTX filed for Chapter 11 bankruptcy on November 11, and former CEO Sam Bankman-Fried stepped down. The company is under investigation in multiple jurisdictions. Multiple agencies in the US are investigating the exchange for mishandling customer funds.

Binance explained that the IRI is not an investment fund. "We have already received around 150 applications from companies seeking support under the IRI," the exchange disclosed.

"The mandate of this new effort is to support the most promising and highest quality companies and projects built by the best technologists and entrepreneurs that, through no fault of their own, are facing significant short-term financial difficulties."

The announcement further details that the initiative is expected to last about six months and "will be flexible on the investment structure, including tokens, fiat, equity, convertible instruments, debt, credit lines, and other options, as we expect individual situations to require tailored solutions."

The much-needed recovery fund has been launched to check the cascading negative effects in the industry. Will it help to boost the flailing fragile industry? Please post your comments.