The FTX collapse shakes the crypto industry deeply. In addition to the loss of trust, the tragedy also brings with it one of the greatest destructions of wealth. Now the world’s largest crypto exchange, Binance, is speaking out and launching the so-called Industry Recovery Initiative (IRI).
Not only FTX and its users have been affected by recent events: companies connected to the exchange are now also facing significant financial difficulties due to the contagion effect. IRI is a $1 billion bailout fund designed to help these companies. In addition to Binance, the initiative is also supported by other industry players.
Recovering from such a devastating setback means a lot of work for the crypto community. Above all, rebuilding trust will be an arduous processs, so some well-known figures expect a late recovery.
However, recent developments may be the first steps towards rebuilding confidence and infrastructure.
Binance takes the first step for crypto funds
The first initiative to increase confidence in the crypto space comes from Binance, the largest crypto exchange by trading volume. The Industry Recovery initiative is a $1 billion fund to help crypto companies in need.
In a blog on November 24, Binance introduced the initiative to protect consumers and rebuild the industry:
“As one of the leading players in the crypto world, we recognize our responsibility to take the lead when it comes to protecting consumers and rebuilding the industry. That’s why we created the Industry Recovery Initiative (IRI), a new co-investment opportunity for organizations that want to support the future of Web 3.”
Binance deposited one billion US dollars into a wallet address that was visible to everyone and announced it in a tweet. If necessary, the exchange will even give another billion in the near future.
So far, Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos and Brooker Group have said a total of USD 50 million. Binance expects more participants to sign up soon.
Up to this point, Binance has received 150 requests for support from companies in need. By means of the mandate only the most promising companies and projects of the highest quality from the best developers receive support. Of course, only if they are in serious financial difficulties.
Binance makes demands
The initiative is in no way an investment fund. It is much more a co-investment opportunity for organizations interested in supporting the future of Web 3.
According to the blog post, the following requirements must be met for a successful application:
“Projects must be characterized by 1) innovation and long-term value creation, 2) a clear and viable business model and 3) a laser focus on risk management (apply here).”
Once the program is launched, it lasts a total of six months.
Just a week before this announcement, Binance’s US arm had made a bid for the assets of insolvent lending platform Voyager Digital. It is another step towards damage limitation and restoring user confidence after the collapse of the FTX exchange.
Want to talk to like-minded people about the latest news and developments? Then join our Telegram group here.
All information on our website has been investigated to the best of our knowledge and belief. The journalistic contributions are for general information purposes only. Any action taken by the reader based on the information on our website is entirely at his own risk.