Crypto Exchange Binance To Take Stake In Forbes Through A $200m Investment

Crypto Exchange Binance To Take Stake In Forbes Through A $200m Investment
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Binance, one of the world’s top cryptocurrency startups, will make an investment of $200 million in Forbes against the equity in the news outlet, marking this the latest twist in the media brand’s 105-year old existence.

Forbes, famed for its billionaire rankings, stated that the deal would assist it in becoming a leader in providing information related to digital assets such as Bitcoin.

However, the investment announcement sparked worries among media observers about potential conflicts of interest.

Binance filed a slander suit against Forbes in 2020 but abandoned the suit later.

Analysts also cautioned that cryptocurrency assets have proven to be particularly vulnerable to celebrity and media hype manipulation, which has prompted regulators worldwide to issue warnings.

Changpeng ‘CZ’ Zhao, the founder of Binance, stated while announcing the Investment that he views media as “an essential element to build widespread consumer understanding and education” of the crypto industry and rapidly growing blockchain technologies.

The Chinese Canadian billionaire, whose net worth is estimated to be above $100 billion, later explained his remarks on Twitter, indicating that his focus was on supporting Forbes in developing its technology and describing Forbes’ editorial independence as “sacrosanct.”

In an interview with CNBC, he said that his company aimed to invest in other traditional businesses to increase the usage of blockchain, a technique for recording transactions that use a shared, decentralized ledger.

According to Forbes, Binance, which regulators have probed in the United States, the United Kingdom, and elsewhere, would provide technical expertise, aiding the business journal to “maximize its brand” and move forward its ambitions to convert readers to paying customers.

It added that the deal would not change its coverage regions but would instead enable the existing digital assets team of the company and “certain additional beats” to grow over time.

“Forbes has been fiercely independent for more than a century, regardless of our ownership, and that is not changing,” spokesman Bill Hankes told the BBC. “The integrity of our trusted journalism is our most important brand asset.”

The deal is taking place at a pivotal point in the bitcoin industry. Over the past couple of years, the value of bitcoin has risen astronomically, while companies have spent money on sports stadium sponsorships, advertising, and government lobbying to expand their power and shape anticipated legislation.

Also Read: Binance Destorys over 1.68 million BNB Tokens in its Latest Burn

According to Henri Arslanian, a partner at PwC who frequently advises crypto enterprises, several crypto companies have extended into other industries, including media, to broaden their reach.

Even if both parties guarantee independence, he feels the collaboration between Binance and a major US media brand will raise issues.

“Binance buying part of Forbes is like McDonald’s buying part of Yelp or Marriott buying part of Trip Advisor,” he wrote on Twitter.

“Even though there might not be a direct conflict of interest, I think the perception will remain,” he later told the BBC.

Forbes was founded in 1917 and was a family-owned company for decades, with a penchant for documenting corporate luminaries. However, the transition from print to digital has been challenging for the company, as it has been for many others in the media sector.

In 2013, the Forbes family placed the company up for sale, and Hong Kong-based Integrated Whale Media purchased a majority stake.

Forbes stated in August that it would become a public company on the New York Stock Exchange through a merger with Magnum Opus, a corporation designed to acquire enterprises seeking to go public.

The organizations said that the transaction, which is expected to be finalized within weeks and valued Forbes at roughly $630 million, would include other partners’ $400 million Investment. Binance is presently trailing by half of that amount.

“Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets,” Forbes chief executive Mike Federle said.

“With Binance’s Investment in Forbes, we now have the experience, network and resources of the world’s leading crypto exchange and one of the world’s most successful blockchain innovators. Forbes, already a resource for people interested in the emerging world of digital assets, can become a true leader in the field with their help.”

(Adapted from BBC.com) 

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