Binance to become one of two biggest owners of Forbes

Binance, the world’s biggest cryptocurrency exchange, will invest $200 million to take a stake in Forbes. The long-standing media publication plans to go public via a merger with a publicly traded special purpose acquisition company.

Binance CEO Changpeng Zhao

The deal, which raises concerns about potential conflicts of interest, would make Binance one of the top two biggest owners of the 104-year-old magazine and digital publisher. The crypto company is now behind half of a $400 million investment in commitments from institutional investors announced earlier.

The company will retain its existing management team under the leadership of CEO Mike Federle, but Binance will get two directors out of nine total board seats.

The SPAC deals values Forbes at $630 million, and the transaction is expected to close later in this quarter. Forbes will trade on the New York Stock Exchange under the ticker symbol FRBS.

Binance CEO Changpeng ‘CZ’ Zhao tweeted that he sees investment in media as “an essential element to build widespread consumer understanding and education” of the crypto market and emerging blockchain technologies.”

Interestingly, Binance sued Forbes and two of its writers for defamation in 2020 for defamation after it published a story that purported to reveal regulatory evasion, but later dropped the case.

Forbes’ leaked documents, allegedly created by Binance’s senior executives, revealed how the world’s most influential cryptocurrency exchange planned to evade US regulations and profit from American investors.

The document, obtained and exclusively published by Forbes, dates back to 2018 and involves a corporate structure plan for its then-unnamed arm in the United States, Binance.US. At the time, the initiative was code-named the ‘Tai Chi entity’, referring to a Chinese martial art that Binance may have conjured up its philosophy to circumvent US laws and its intensive regulatory scrutiny.

From the outside looking in, the world’s largest crypto exchange was going legit. However, the leaked Tai Chi document describes a secret strategy that depended on avoiding regulatory accountability by playing a high-stakes game of cat-and-mouse with policymakers around the world.

Specifically, the strategic plan proposed to CEO, Changpeng Zhao and other top executives tricky measures to transfer Binance.US revenue to its parent in the form of licensing fees.

Moreover, Binance, the parent company, was allegedly facilitating unregistered trading to US customers while flouting the nation’s banking laws. While Americans were not allowed to access its trading services through IP addresses based in the US, potential customers were taught how to mask their actual identities through virtual private networks, or VPNs, to disguise their locations.

 

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