Cryptocurrency exchange Binance to invest $200 million in Forbes

Cryptocurrency exchange Binance will acquire a $200 million stake in the century-old US business magazine Forbes, which plans to go public through a special purpose acquisition company (Spac , in English).

Forbes is seeking $400 million of additional capital through a private transaction as part of its New York listing plans, through a partnership with Magnum Opus Acquisition Limited, a agreement that should value the company’s title at US$ 630 million (R$ 3.3 billion).

The proposed investment by Binance Capital Management, a crypto asset investment vehicle registered in the British Virgin Islands, would mean that two top Binance executives would be named directors of the Forbes board.

The broker’s plans to acquire a stake in Forbes highlight the growing influence of digital asset companies, many of which have grown at a rapid pace in recent years, in traditional markets, from media to finance.

Binance, one of the world’s largest cryptocurrency exchanges, sued Forbes for defamation in 2020 over a magazine investigation that said the cryptocurrency group used its complex corporate structure to intentionally evade US regulation, allegations Binance has denied. . The brokerage later dropped the process.

“It’s water under the bridge,” Patrick Hillmann, director of communications at Binance, said of the process.

Hillmann, who will join the publisher’s board, said Forbes journalists “have our pure and absolute respect” and that the publisher’s editorial independence will be “100%” guaranteed.

He said the deal will help Forbes expand its digital ambitions: “Our team has some big ideas that we want to bring to Forbes’ leadership team.”

The deal represents a major foray into mainstream media for a cryptocurrency company. The US-based Digital Currency Group already owns CoinDesk, a well-known cryptocurrency specialist publication.

Forbes, founded by Bertie Charles Forbes and Walter Drey over a century ago, published its first issue in 1917 and is known for tracking the world’s wealthiest individuals, including those who have made money in recent years from the rise of cryptocurrencies.

“With Binance’s investment in Forbes, we now have the experience, network and resources of the world’s leading cryptocurrency exchange and one of the world’s most successful blockchain innovators,” said Mike Federle, Chief Executive of Forbes. “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.”

The company struck a deal in August with Magnum Opus Acquisition, a Spac backed by Hong Kong-based private investment firm L2 Capital, that is expected to raise $600 million in new investment.

Binance’s investment came after several months of trading. Hillmann said Binance is considering further investments in media and other sectors as it aims to build its business as a “blockchain infrastructure” provider.

Binance’s investment comprises half of the $400 million private contribution to the Spac deal. Spacs often raise this type of financing, which serves as a form of validation of the company’s market assessment and prospects.

The so-called Pipe market has dried up significantly in recent months as enthusiasm for business with special purpose companies has cooled significantly due to poor performance and increasing regulatory scrutiny.

Best known for its list of billionaires, Forbes magazine has chronicled the rise of the very rich in recent decades, with its data often used by economists who study wealth inequality. In 2018, it began building a wealth database that assesses cryptocurrency billionaires, and it also launched lists aimed at highlighting promising cryptocurrency startups.

Among the crypto billionaires Forbes assesses is Changpeng “CZ” Zhao, founder of Binance, who has a net worth of $1.9 billion, according to the magazine, and appeared on its cover. in 2018.