What Binance’s Investment in Forbes Means for Crypto Users
Binance has invested $200 million in Forbes. This investment is noteworthy because Forbes is one of the papers of record for Wall Street. Indeed, Forbes is a 105-year-old media gatekeeper of the old economy, a ranking aristocrat of old capital.
On the other hand, Binance is the young upstart that has no headquarters but has the audacity to take on Wall Street. Forbes first ignored Binance and then tried to destroy it. Now Binance owns a piece of Forbes.
The whole saga has a Shakespearean feel to it. What signal does this move send to crypto investors? And will Binance use Forbes to influence regulators and markets?
The Protagonists: Forbes vs. Binance
Forbes magazine was founded in 1917, back when the telegraph was still cutting edge technology, and only a few could use it. Binance was founded in 2017, exactly 100 years later, when the internet-enabled citizens to topple governments.
The relationship between Binance and Forbes hasn’t always been clear sailing. Indeed, in October 2020, Forbes launched a devastating takedown of Binance through a widely read article that accused the crypto exchange of “baiting and switching” the US government.
The story accused Binance of hatching a two-pronged plan. The first prong involved setting up a US subsidiary to convince US regulators that Binance intended to comply with US law while quietly transferring revenues from the US operation to its parent company, which originally started out in Hong Kong but now doesn’t have a definite headquarters.
The second prong was to create technological tools to help its customers trade crypto while escaping the scrutiny of regulators worldwide. Needless to say, these were serious charges that exposed Binance to an existential threat from both industry and regulators.
Binance immediately responded with a defamation lawsuit denying all allegations. “Binance does not violate, and fully complies with, all applicable laws, rules, and regulations in its operations. Binance does not seek to evade or ‘side-step’ any regulatory entities in any jurisdictions in connection with their role in ensuring that all laws, rules, and regulations of their jurisdictions are complied with,” Binance said.
Suddenly, in February 2021, Binance voluntarily withdrew the lawsuit against Forbes Media LLC just three months after filing it.
At the time, Binance did not explain why it did so and refused to comment on the matter, leaving everyone scratching their heads. But now, with the revelation of this investment, it is safe to speculate that Binance decided a boardroom strategy is superior to a courtroom strategy.
Will Forbes Retain Editorial Independence After Binance Aquisition?
After the acquisition, Binance CEO, Changpeng ‘CZ’ Zhao, Binance Founder and CEO, released a statement saying, “We know that media is an essential element to build widespread consumer understanding and education.” That seemed to suggest that, yes, Forbes would support the Binance agenda.
The CEO got some blowback in his Twitter DMs, which prompted him to issue the following tweet promising to respect the editorial independence of Forbes.
Zhao, who takes a stream-of-consciousness approach to Twitter like fellow billionaire Elon Musk, later issued a bizarre tweet distancing himself from the Forbes deal, saying, actually, he had nothing to do with it, and only went on TV to take credit for it:
For the time being, at least, Forbes’ editorial independence seems to be holding up. The article attacking Binance is still available on the Forbes website. One must wonder, however, how long that will last. After all, the transaction has not been concluded yet.
When the deal is done, Binance will be one of the two top owners of Forbes. In addition, two Binance executives will join the Forbes Board: Patrick Hillmann, Chief Communications Officer for Binance, and Bill Chin, Head of Binance Labs.
How Will the Binance-Forbes DeaI Impact Crypto Users?
Forbes claims to have an audience of 150 million people. With this transaction, one can expect that some strategic Binance talent will be crossing over to Forbes. One can also expect that in due course, the influence of Forbes and the expertise of Binance will be jointly deployed to tell the Crypto story.
Certainly, Forbes will take a keen but positive interest in cryptos and Web 3.0 in the future. And where Forbes goes, CNBC, Bloomberg, the New York Times, and, eventually, Wall Street will follow.
If things work out that way in the long run, buying into Forbes will prove a good move for Binance and investors. For an entity that oversees $10 billion of crypto trades a day, $200 million to get a foothold in the communication side of Wall Street is a steal.
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