Binance, one of the world’s biggest cryptocurrency firms, will take a $200m (£147.6m) stake in Forbes in the latest twist for the 105-year-old media brand.
Forbes, known for its ranking of billionaires, said the deal would help make it a leader supplying information about digital assets, like Bitcoin. But news of the investment sparked questions among media watchers about potential conflicts of interest. Binance sued Forbes in 2020 for defamation, later dropping the case.
Analysts also noted that crypto assets have proven particularly vulnerable to manipulation by celebrities and media hype, prompting warnings from regulators around the world.
In a statement announcing the investment, Binance founder Changpeng ‘CZ’ Zhao said he saw media as “an essential element to build widespread consumer understanding and education” of the crypto market and emerging blockchain technologies.
The Chinese Canadian billionaire, whose net worth is estimated to be nearly $100bn, later took to Twitter to clarify his comments, saying his focus was on helping Forbes build out its technology and calling Forbes’ editorial independence “sacrosanct”.
He told broadcaster CNBC that his firm was also eyeing investments in other traditional companies as it looks to advance adoption of blockchain, a system for recording transactions that uses a shared, decentralised ledger.
Forbes said Binance – which has faced scrutiny from regulators in the US, UK and elsewhere – would provide technology advice, helping the business publication “maximize its brand” and advance plans to convert readers to paying subscribers.
It said the deal would not change its areas of coverage, but hopefully allow its existing digital assets team and “some other 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 comes at a key moment for the crypto industry. Currencies such as Bitcoin have seen values skyrocket, while companies have been spending on sports stadium sponsorships, advertising and government lobbying to expand their influence and shape anticipated regulation.
Many crypto firms have been branching out into new areas, including media, as they look to increase their reach, said Henri Arslanian, a partner at PwC who frequently advises crypto firms.
He added even if both sides promise independence, the tie-up between Binance and a major US media brand will raise questions
“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.
‘De-mystifying’ digital assets
Forbes, founded in 1917, was for decades family-owned with a name made covering the titans of the business world. But as with many in the media industry, its transition from print to digital has been rocky.
In 2013, the Forbes family put the business up for sale and Hong Kong-based Integrated Whale Media acquired a majority stake.
Last August, Forbes said it would list publicly on the New York Stock Exchange via a merger with Magnum Opus, a firm established to buy companies looking to go public.
The firms said the deal, which valued Forbes at roughly $630m and is expected to be finalised within weeks, would come with a $400m investment by other partners. Binance is now behind half of that sum.
“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.”
Forbes today counts an audience of more than 150 million people worldwide, with 45 licensed local editions covering 76 countries. Its online content is bolstered by articles written by a small army of contributors, a model that has at times raised questions about the brand’s reliability.
This week, one of its former contributors, Heather Morgan, was accused of participating in a scheme to launder millions of dollars stolen in 2016 in a hack of a Bitcoin exchange. Forbes said the relationship ended last year.
SOURCE: BBC.COM
