Binance converts the Industry Recovery Initiative (IRI) fund assets from the Binance USD (BUSD) stablecoin into Bitcoin, Ethereum and BNB. This was stated by the exchange’s chief executive, Changpeng Zhao.
Given the changes in stable coins and banks, #Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including #BTC, #BNB and ETH. Some fund movements will occur on-chain. Transparency.
— CZ ? Binance (@cz_binance) March 13, 2023
“Given changes in stablecoins and banks, Binance will convert the remaining assets from the $1 billion IRI into native crypto, including Bitcoin, BNB and Ethereum. Some fund movements will occur on-chain. Transparency,” he wrote.
Zhao did not specify which changes he had in mind. Perhaps the Binance CEO was referring to the liquidation of Silvergate Bank, the closure of Silicon Valley Bank (SVB) and the subsequent decoupling of stablecoins USD Coin (USDC), DAI and FRAX from the US dollar.
Earlier, the exchange’s chief commented on the state of the banking sector, but at the time of writing he had deleted the tweet. According to the screenshot, Zhao questioned the need to rescue troubled financial institutions — in his view, such help reduces incentives to manage risk.
“It would be foolish not to take on maximum risk for maximum gain and to share the rewards as soon as you receive them. When you fail, you receive financial assistance,” wrote the head of Binance.
On March 12, the US Treasury, the Federal Reserve System and the FDIC Fed and FDIC issued a joint statement on measures to support the banking system. According to the agencies, the deposits of SVB and another bank closed by authorities — Signature Bank — will be returned in full.
Back in November 2022, Binance launched IRI to mitigate the cascading negative effects of the FTX collapse on the crypto industry. The platform contributed $1 billion to the fund and said it planned to raise that amount to $2 billion.
In February 2023, NYDFS initiated an investigation into the BUSD issuer Paxos. Representatives of the latter said they halted the issuance of new coins in line with regulator requirements and severed cooperation with Binance on the stablecoin.