Unanswered questions about the Binance Industry Recovery Fund

Binance recently announced that it was converting its ‘Secure Asset Fund for Users’ (SAFU) fund to the USDC token. This SAFU fund was a pseudo-insurance fund in which Binance stored funds to hopefully reimburse users if something were to go wrong with the platform.

Before the conversion, the fund was held in several coins, including BTC, USDT, BNB and TUSD.

These changes to the fund have brought to mind Binance’s earlier ‘Industry Recovery Fund’ and the lack of updates about the project.

What was the Industry Recovery Fund?

While FTX was collapsing into bankruptcy, financial criminal Changpeng Zhao tweeted that Binance was ‘forming an industry recovery fund to help projects that are otherwise strong, but in a liquidity crisis.’

This fund ended up reaching a total size of $1.1 billion and was initially held in Binance USD (BUSD), a Binance-branded stablecoin. 

Despite Zhao describing it as a ‘fund,’ later communications from Binance clarified that the Industry Recovery Initiative (IRI) “is not an investment fund. Rather, each participant (including Binance) reviews the IRI applications as they come in and makes investment decisions independently of each other, on a deal-by-deal basis.”

According to Binance, the Industry Recovery Fund received support from Animoca Brands, Aptos Labs, Brooker Group, DWF Labs, GSR, Jump Crypto, Kronos, and Polygon Ventures.

What were the investments?

Very few industry projects received investment from this initiative.

Instead, Binance seems to have used this fund to invest in a majority stake in an exchange called GOPAX which had a self-described decentralized finance (DeFi) service that ended due to the failure of crypto lender Genesis.

Despite this investment, the full takeover has been delayed by financial regulators.

Partners claimed to have invested in a total of 13 other projects as part of the initiative but only two were named.

Protos has reached out to Binance to determine if there were other investments, but as of press time, it hasn’t responded. 

Besides those investments, the only other significant activity since the fund’s launch came when it was converted from stablecoins into BNB, bitcoin, and ether — the polar opposite of the recent SAFU fund swap. 

Read more: Binance and CZ plead guilty but SEC lawsuit remains

Where is the Binance Industry Recovery Fund?

Zhao previously disclosed an Ethereum address that was holding the Industry Recovery Fund, which at the time was approximately $1 billion in BUSD. The BUSD was transferred from this wallet to another Binance address, but strangely, the replacement ether never flowed into this address. Binance hasn’t released a new disclosure that shares where the funds related to this initiative are held.

How much is the Binance Industry Recovery Fund worth?

The Industry Recovery Fund should have appreciated in value since these transactions. The BUSD was transferred out on March 13, 2023, and since then:

  • Ether has increased in value from about $1,500 to approximately $3,200.
  • Bitcoin has increased in value from around $22,000 to roughly $66,000.
  • BNB has increased in value from $300 to around $600.

It’s quite possible that the Industry Recovery Fund is now worth $2 billion or even more, prima facie proof that the industry has recovered.

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