In an interesting move that caught many off guard, myself included, Binance announced it has taken a $200 million stake in Forbes which is going public via SPAC in Q1 of this year. Binance is actually replacing half of the money institutional investors had put forth for this making it one of the two largest shareholders once the company goes public. Luckily I had CNBC on in the background when they announced that they were going to have CZ on an interview him about this move by Binance.
For those of you who do not know Forbes is a 104-year-old magazine and digital publisher that in the US at least has a ton of history and credibility behind its name. After all, a company does not stick around for 104 years if it is not good at its job of engaging its audience. In 2014 95% of the company was sold to a Hong Kong-based Media company at an evaluation of $475 million and through its publications and events claims to have an audience of 150 million people. One of its most popular things is its list of the richest people in the world that it releases each year.
Giving credit where it is due the CNBC hosts were pretty critical and asked some pretty pointed questions to CZ to try and understand the reason/logic behind this move. We have recently seen huge moves by companies for branding rights but not so much for buying traditional forms of media. As most of you know in the United States where Forbes is going to list its stock Binance itself is not available and instead, we have a separate version called Binance.US that still is not even legal in some states. CZ has previously announced that Binance would expand in the US and be adding additional people to its staff however publically not much has changed as Binance.US users cannot even access the BSC bridge!
When asked about why Binance would be interested in what many have called a dying media CZ discussed a range of reasons he believed this was a correct move. Naturally, he said that by purchasing this stake they could accept crypto for subscriptions furthering adoption by individuals and even helping expand Forbes presence. He also commented on something we have seen a growing increase in and that is these legacy brands like Sports Illustration, The New York Times, and more issuing NFT's of historic or well-known covers from over the years. With the NFT market still developing and Forbes having a highly recognizable brand name this makes sense to try and capture its future NFT market. CZ also pushed back over the idea of Forbes being a dying form of media because we are in the age of information and Forbes works with/in multiple different sectors implying there is room for further growth. When asked about Binance and Binance.US and its 1% fee compared to Coinbase which has a fee that can range to over 4% CZ said something that I actually did not know. Binance and Binance.US are transparent with the fee being just 1% whereas it is known that Coinbase makes money not only on the fee they are charging but ALSO on the possible spread difference that occurs during the transaction. Binance does not take this and instead passes the additional gains along to the individual. I had no idea that this was something that Binance did but is something that I hope to see other CEX's adopt.
While he made some good points he also did the typical thing I expect from business leaders and ducked and dodged some tougher points. In particular, he was asked about Forbes remaining independent and investigating and reporting as freely as possible. In the US Forbes has published articles critical of Binance in the past and highlighted the regulator issues that they were facing in the past. While he tried to give off the idea that Forbes would maintain being independent and free of Binance influence he did not make any promises or discuss how this would be ensured. Another issue he failed to really address happened this last week with the arrest of Heather Morgan and her husband for their ties to the Bittfinex hack in 2016. Heather Morgan was a contributor to Forbes publishing over 40 articles between 2017 and 2021 which is pretty significant and not a good look for another exchange to move in and back said company. Instead of addressing it rather he just highlighted the past and how great Forbes was as a company and brand.
These answers left a lot to be desired as I want to make sure that the articles I read are accurate and not being pushed by a possible rival company or rival crypto which Binance in theory could do. I would expect as more comes out about the deal and the deal is vetted by US regulators we will get much clearer information about the protections that are going to be put into place for the journalists and editors of Forbes. It is not a stretch to say either that Binance will benefit from having a 110% legal and in theory base in the US with this move as well. Finally, there will be an address the regulators across the world have been after for a long long time!
The final topic that the hosts questioned CZ on was Binances stablecoin BUSD and the reserves around it. With the US moving closer and closer towards regulating and investigating stablecoin issuance the hosts wanted to learn more about Binance. CZ's response was perfect. It was clear, concise, and most importantly not in crypto lingo. BUSD, while branded as a Binance stablecoin, is actually completely controlled by Paxos who the US government has a very good relationship with. Paxos has its own stablecoin USDP which CZ made sure to highlight as one of the most transparent, fully backed, and consistently audited stablecoins out there. He highlighted an issue that many have pointed out and that is how Tether or USDT really is a black box where a lot of its backing is kept from the public and honestly is just really kind of sketchy.
Overall this interview was pretty informative and gave people the reasoning behind Binance's interesting Forbes move. Again as more information about the deal comes out I am sure the issues I highlighted above will be addressed especially in today's day and age where journalism has been running into some issues with censorship. It will be interesting to see if Binance retains its large stake in the company over the long haul or if they end up shrinking it down if the stock does really well and increases in value.
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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