In the aftermath of FTX’s collapse, the cryptocurrency industry was thrown into turmoil. Prices dropped, investors rushed to minimize their losses, and startup funding dried up. Amidst the chaos, all eyes turned to Changpeng Zhao, the founder of Binance, who became the last remaining tycoon in the crypto world after Sam Bankman-Fried’s swift downfall.With a bold vision to rescue struggling startups, Zhao rallied industry leaders to raise a minimum of $1 billion. However, according to Bloomberg, the Industry Recovery Initiative (IRI) fell short of expectations, leaving the crypto market starved for cash and companies on the verge of collapse almost a year later.Zhao’s plan aimed to provide a lifeline to promising startups facing financial constraints beyond their control. Time was of the essence, as Zhao emphasized in a Bloomberg Television interview. However, a recent analysis by Bloomberg News revealed that less than $30 million has been deployed since the IRI’s inception.Out of the nine named participants, only one has invested all their committed funds. This disappointing outcome has left the crypto asset sector struggling, with companies forced to downsize and cut jobs to stay afloat.While some well-known companies, including Jump Crypto and Animoca Brands, joined the IRI with around $70 million in funds, none came close to Binance’s contribution of roughly $1 billion in its branded stablecoin Binance USD (BUSD).The IRI was structured differently from a traditional fund, allowing participants the freedom to invest their committed funds as they saw fit. Binance claimed that 18 companies participated, but only nine were publicly identified.Transparency was a key selling point of the IRI, with Zhao emphasizing the use of public wallets to ensure accountability. However, the initiative fell short of this promise, according to Bloomberg. Allegedly, Binance has moved $985 million of the committed funds back to its corporate treasury for other investments. The last publicly announced deal through the IRI was Binance’s $15 million majority stake purchase in South Korean crypto exchange GOPAX, pending regulatory approval.While Binance’s intentions to rescue the crypto market were commendable, the lack of follow-through has raised concerns about the industry’s future. Venture capital investment in crypto firms has plummeted since the FTX collapse and has struggled to recover. Startups now face challenges in securing funding, with deals taking longer to close. This situation has left many startups in precarious positions and hindered their growth prospects.As of the current writing, Binance Coin (BNB) is trading at $207, showing a slight increase of 0.1% over the past 24 hours. On Monday, BNB attempted to break through its nearest resistance level at $213 but was unsuccessful.Overall, the failure of Changpeng Zhao’s $1 billion rescue plan has left the crypto industry in a precarious state, with startups struggling to survive and secure funding. The lack of transparency and follow-through has raised concerns about the future of the industry, which has yet to fully recover from the FTX collapse.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Asia |
| Countries | |
| Sentiment | negative |
| Relevance Score | 0 |
| People | Changpeng Zhao |
| Companies | South Korean crypto exchange GOPAX, Binance, Jump Crypto, Animoca Brands |
| Currencies | US Dollar, BNB |
| Securities | None |
