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- This week, Binance invested $200 million into media giant Forbes which is set to go public via a SPAC deal soon, becoming one of the top two owners of the firm.
- The acquisition is the first by a crypto entity on a traditional media company, and it could be the first step towards a more positive coverage of crypto.
Changpeng Zhao’s empire is growing by the day. The latest addition is, however, a little unorthodox and extends beyond his traditional investment circle around crypto entities. The Binance CEO has invested $200 million in Forbes, a media giant which is reportedly set to list publicly in a few months’ time. It’s an acquisition that went under the radar, but one that could have quite some impact on not just Binance but the entire cryptocurrency market.
Zhao, or CZ as his fans call him, is estimated to be worth $77 billion by the Bloomberg Billionaires Index, the 14th richest person on the list, just below Facebook’s Mark Zuckerberg. This year, his wealth has dipped by $19 billion, but he’s still the richest man in finance globally, let alone crypto.
Changpeng “CZ” Zhao lost $13B overnight as market crashed, but he’s still the richest man in finance
Binance is an even bigger behemoth, with some estimating it to be worth over $200 billion. And the exchange has been making strategic acquisitions as it continues to dominate the crypto trading world. From Coinmarketcap to Swipe.io, Trust Wallet to DappReview, the company has been expanding its crypto reach.
The latest is a media house. Binance invested $200 million in Forbes, funds which the 104-year-old publisher will use to execute its plan to merge with a special purpose acquisition company (SPAC) and list publicly on the New York Stock Exchange.
Binance will repay half the $400 million that institutional investors had committed with Forbes. This will make it one of the top two owners of Forbes and accord the exchange two of the nine board seats.
What does the Forbes investment mean for Binance and crypto?
For Binance to invest $200 million in Forbes, then the media house is important to the exchange’s strategy moving forward, that much is clear. While it has invested in several companies, Binance doesn’t usually commit this much money, except the Coinmarketcap deal in which it committed $400 million.
But even before we go into what this means for Binance, it’s important to acknowledge just how big a move it is for crypto. Before this, media houses have partnered with crypto entities, like TIME Magazine with Crypto.com and Bloomberg with Galaxy Digital.
However, Binance will be the first crypto entity to own a major traditional media house, and Forbes no less. The publisher reaches 150 million people monthly by print, digital editions and events. This will be great publicity for crypto and shows just how influential the industry has become.
For Binance, the acquisition is strategic, one insider said. Speaking to CNBC, the source, who has access to Binance’s strategy stated:
This is the first step into a marketplace that has really high potential when it comes to adoption of Web 3.0-based tools. Our industry has seen a ton of growth and we think you’d have to be a fool to not position yourself in those sectors that are ripe for infrastructure investment.
The investment could also be the first step towards changing the reputation Binance has gained as a notorious entity that breaks laws for fun. Multiple media giants have reported on how Binance has flouted financial laws, from Bloomberg to Fortune.
The latest was Reuters which exposed how multiple execs in Binance told CZ that the exchange was failing in its compliance obligations. CZ allegedly dismissed the complaints and even encouraged them to use underhand tactics just to attract more users.
Shaping opinions in crypto and beyond
There’s an old adage in the media world that goes, “We can’t tell you what to think, but we can tell you what to think about.”
This might be just what Binance will rely on. For an industry that’s just over a decade old, crypto is definitely a sector that’s susceptible to radical shifts in opinion. Just two years ago, an altcoin could shoot up overnight after some positive news. The reverse was true, and some bad press could drag a cryptocurrency down in hours.
Much has changed since then. However, reputation is still as critical. Remember when Binance acquired Coinmarketcap for a staggering $400 million?
Everyone was up in arms at the time, pointing to the conflict of interest in the acquisition. CMC ranks the biggest exchanges and tokens, and would now be controlled by CZ and his exchange. As one rival said at the time, “it’s like if Joe’s Pizza came out with the top 10 pizza slices in New York.”
Since the acquisition, Binance has ranked atop the CMC list. This was after it changed the rankings to factor in things like liquidity and weekly web visits, metrics that catapulted it to the top. And while the ranking is most probably legitimate, it still makes you think.
And now, in the latest ranking of the best exchanges of 2022 by Forbes Advisors, guess who ranks number 1? Yes, it’s Binance.US with a score of 4.9.
