Reputation-challenged crypto exchange Binance has taken a $200 million stake in the Forbes ‘business information brand’ as part of the media outlet’s plan to take itself public on the New York Stock Exchange.
Forbes previously teamed with NYSE-listed special purpose acquisition company Magnum Opus Acquisition Ltd to make its public market debut, which is now expected before the end of the current quarter. Binance’s ‘strategic investment’ reportedly represents half of the commitments in the private investment in public equity (PIPE) funding that Forbes announced last August.
The deals are intended to help Forbes “maximize its brand and enterprise values” by turning readers into “long-term, engaged customers of the platform.” Thursday’s release quoted Binance CEO Changpeng ‘CZ’ Zhao saying “we know that media is an essential element to build widespread consumer understanding and education,” a sentiment that takes on a more sinister tone when you consider Binance’s historical preference for obfuscation over enlightenment.
Thursday’s announcement came just one year after Binance dropped a defamation suit the exchange had launched following publication of an October 2020 Forbes article. That article revealed the existence of the so-called ‘Tai Chi’ papers, which detailed Binance’s efforts to structure its business to continue serving U.S. customers under the table while making it appear as if it was complying with U.S. regulatory restrictions.
Binance has routinely engaged in this type of ‘compliance theater’ over the years, making high-profile pronouncements of seeking to engage with regulators and apply for licenses in countless jurisdictions, only to quietly shelve these plans when it turns out that actually complying with regulations and employing real know your customer (KYC) protocols would negatively impact the company’s bottom line.
‘Binance smells like puppies’
With Binance increasingly in need of some good press, the Forbes deal looks impossibly cynical and will almost certainly lead to the end of unflattering coverage of the cryptocurrency exchange on the platform. Given the recent Reuters report detailing CZ pressing Binance execs to ignore KYC protocols, we presume Binance reps are currently loitering around Thomson Reuters’ London offices waving blank checks.
While Forbes is (was?) still capable of solid investigative reporting, recent years have seen its digital arm come under increasing criticism for its ‘contributor’ program, which has been slammed as a ‘pay to play’ revenue stream that is changing Forbes.com into “a platform for scams, grift and bad journalism.”
It remains to be seen how much ‘play’ $200 million will buy, but with two senior Binance execs set to serve as Forbes directors, brace yourself for Teen Beat-worthy articles on how CZ keeps his teeth so shiny and his breath so minty fresh.
A Binance spokesperson told Reuters that Forbes’ editorial stance “will remain sacrosanct and entirely independent from Binance.” CZ almost immediately spoiled this nascent narrative by later telling CNBC that Forbes would remain “fairly independent.” Proving that habits are indeed hard to break, CZ also claimed that Binance would continue its “efforts to hire more people, to be fully compliant everywhere, get licenses everywhere. That hasn’t changed.”
Indeed, Binance hasn’t changed. It will continue to say all the right things in public about compliance while continuing to serve as one of the leading lights in the crypto crime cartel. With one leading media critic now effectively muzzled, it will be up to the rest of us to continue holding Binance’s feet to the flame.
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