Binance is taking a $200M stake in Forbes | Hacker News Reader

Binance is taking a $200M stake in Forbes

cnbc.com

157 pointsdkobia118 comments

This has big "Bernie Madoff when he was chairman of the NASDAQ" vibes. [1]

[edit] For those following along at home, Binance was kicked out of - or saw significant regulatory pressure in - the UK, Japan, Lithuania, the Netherlands, Germany, Malaysia, Hong Kong, South Africa, Thailand, Ontario, Uganda, Malta ... and I think a few others?

They're also under investigation by the Cayman Islands Monetary Authority. [2, 3] I am legitimately impressed, it's not easy to get the attention of regulators in the Caymans.

It seems Forbes was hot on their tail a while back when they wanted to create strategic bait-and-switch entities in various jurisdictions including the US ("Tai Chi Document"). [4] Binance then sued them for defamation - then voluntarily dropped the suit.

I suspect such investigations will no longer be welcome.

[1] https://en.wikipedia.org/wiki/Bernie_Madoff

[2] https://www.cima.ky/binance-not-regulated-by-cima

[3] https://www.theblockcrypto.com/post/110358/cayman-islands-in...

[4] https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/l...

Just goes to show that “money talks” regardless of how it’s obtained.

I feel bad for whoever is going to be left holding the bag when it all “pops” and the funny money can no longer be converted into real money. It’s going to do real damage to those that, unlike Zhao, haven’t been able to cash out.

My biggest fear is a 1997 Albania situation but on a global scale. MLMs locked up 50% of their GDP, and it led to a civil war killing thousands. [1] It was all fun and games until war were declared. Then, well, war were declared.

  When the schemes collapsed, there was uncontained rioting, the government fell, and the country descended into anarchy and a near civil war in which some 2,000 people were killed.

[1] https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.ht...

I see you posting this kind of stuff on crypto threads regularly, and I'm no crypto bro, but I definitely think you're being hyperbolic. For context, the entire market cap of crypto is a third less than $AAPL. The idea that a crypto crash (hell, even if it goes to zero) is going to lead to riots is bonkers. In the next ~10 years, it's probably just going to get mildly regulated and stabilize as a (riskier) investment instrument.

If it dropped off the face of the earth today, nobody at all would notice. Well, my Twitter timeline would clean up. But otherwise, nothing would happen. It's an issue of scale. If it continue to grow unabated, it's a real risk.

This is sort of frog boiling. It's legal tender in one of the world's poorest countries, where there were already Bitcoin riots. The space has seen investments from the Quebec pension plan, and the Ontario teachers pension plan.

If at each milestone we step back and say, well, it's not a systemic risk today so let's just ignore it - one day we turn around, and it's a systemic risk to the global financial system. Mortgage backed securities weren't a risk until one day they were. Albanian MLMs weren't a risk until one day they were.

Just like Bitcoin's electricity usage. Hal Finney mentioned CO2 risk a decade ago. Now it consumes an entire country of power to do the work of a single Raspberry Pi. Each time the price goes up, so does its waste budget. However at every step along the way, folks continued to downplay. The longer we ignore it the more the cancer metastasizes. Until one day, pop.

Forget where it's at now, assess it based on its incentives and its trajectory. It won't get regulated unless people speak out. The sooner, the better.

On the financial observations, all of those systemic risks were due to leverage. If there was real leverage intertwined with the parallel financial system, bitcoin and crypto would have to be 50 times larger, 100 trillion market cap full of commercial paper, longer dated bonds, rebundled and collateralized, and then those further traded on leverage.

If you don't think the crypto space is leveraged to the tits and back in an ouroborosian orgy of rehypothecation I've got an NFT representing legal title to the Brooklyn bridge to sell you.

But no, leverage isn't what took down the Albanians. It was investing 50% of their GDP in unproductive MLMs.

I think there is a lot of leverage in the crypto space, I don't think there is much contagion to the other financial system, yet.

Ah, I see, apologies if I misread because I agree with you.

Not to mention the "market cap" is complete fiction.

I think you can notice this best on a new coin. I was looking at chia for whatever stupid idea they had with proof by useless storage.

https://coinmarketcap.com/currencies/chia-network/

If you go to the 5 year market cap chart, it goes from 0 to 342 million when offered. That is 342 million dollars out of thin air backed by nothing.

Now it is at 248 million but there is no future cash flow that is being valued at 248 million by the market as it was an equity. It is really -94 million but the 248 million is still being summed into that bogus total market cap.

> For context, the entire market cap of crypto is less than a third of $AAPL.

I agree with your comment but maybe you meant to say “a third less”? Crypto is ca. 70% of AAPL mcap.

Yep, fixed!

There was this research (phoning 1000 people who invest more than 10k with 50k income in the US) that 25% of Americans hold crypto:

https://grayscale.com/wp-content/uploads/2021/12/Grayscale-2...

That's interesting. I have trouble to believe that's actually the case in the US. There might be a non-normalised sample or some other statistical snafu.

I would expect something like that in countries with more unstable currencies or serious economic issues like how Greece was a few years back but on the other hand it's more mainstream right now right?

The saving grace of crypto ofc is that it is EXTREMELY top heavy, so even if there is $1tn tied up in crypto, probably under 100k people control 95%+ of it.

And good luck leading the revolution, Winklevos twins…

It won't be the people at the top leading the revolt. It never is. They'll have creamed enough off to be safe whatever happens. It'll be the people at the bottom. They might not have large individual "investments", but it is large to them, and when one day all of that disappears, they won't be happy. And there will be a lot of them, the 99.999% who own a tiny percentage of the total wealth. Remember - strength in numbers...

LMFAO, what is this a crypto.com commercial?

The average Coinbase account has $1k in it (the median is even less). Not exactly riot-worthy.

I often wonder how much all this hype is just amplified in the tech sphere but just doesn’t have any realworld significance.

Are just a few thousand crypto bros gonna lose billions of made up money or will it really have any impact on realworld finances?

Cryptocurrencies have made greater inroads among the poor in America than the middle class, so it'll definitely hit them hard. I'm not sure if that's what you mean by realworld finances, but it's a worry.

So lower income people tend to set money aside for crypto? Do they use cryptocurrencies to buy stuff?

Of course, MLMs routinely target poorer populations with promises of getting rich quick.

...and I thought Amway was bad!

At this point the lesson will be an expensive one for those still bag holding. It’s the retail investors who have their $5k holdings that will be most hurt. Not the guys running the exchanges. They figured out how to sell picks and shovels.

Exactly. The first crypto billionaire became a billionaire by operating an exchange, not holding some random crypto

nonono. exchanges trade against their customers and have to change banks after their previous ones get so full of money they can't make room for any more.

I’ve been waiting 10 years for the crypto bubble to finally pop. I have no idea how it still manages to be a going concern.

I wish I knew what will finally spell the end of Bitcoin.

I've been waiting over twice as long for the internet bubble to pop. Some of this stuff can stay irrational much longer than we'd expect.

And since I brought up Madoff, he managed to run for 17 years right under the nose of authorities. So I wouldn't count on their help any time soon either.

I've been waiting a long time for "the cloud" bubble to pop but it might take a recession.

Rising rates. Will hurt stock markets too but sound businesses will always bounce back.

It will keep evolving. The only way anyone manages to kill crypto (as a technology and asset class hybrid) is by making it technologically obsolete.

I don’t think you feel bad, I think you feel good about shitting on crypto.

There's a lot of schadenfreude on any crypto thread in HN.

I think you're overstating the relative importance and influence of Forbes.

As a side note, I like Binance Smart Chain. It's an EVM compliant alternative to Ethereum except with proof of stake and much lower fees. It costs about $0.12 to call a smart contract. To someone like me who is interested in the technology of smart contracts and doesn't want to pay $40 to interact with a contract, this is a dream come true.

> As a side note, I like Binance Smart Chain. It's an EVM compliant alternative to Ethereum except with proof of stake and much lower fees. It costs about $0.12 to call a smart contract. To someone like me who is interested in the technology of smart contracts and doesn't want to pay $40 to interact with a contract, this is a dream come true.

Right, it's a centralized clone of ethereum operated by Binance. If you're ok with centralization just fire up an EC2 instance. The free tier includes 750 hours per month.

I don't think hosting your own node allows you to interact with contracts for free. I can (and have) played on the devnet, but you're limited there to interacting with contracts hosted on devnet. Can you elaborate what you mean?

My point was rather that if you're ok with centralization, ok without censorship resistance, and ok without meaningful absolute reliability guarantees - all of which is true on BSC - and you value low cost and low latency, what on earth are you doing using a blockchain?

At $0.12 per execution that's one heck of an expensive AWS Lambda function, which are normally priced at $0.0000002 each and $0.0000133334 per GB-second of execution on ARM.

Lambda is about 625,000 times cheaper per request than BSC while offering the same-or-dramatically-better guarantees. [1]

[edit] Ah, I see the answer to my question is regulatory arbitrage. Gotcha. Along with crime and grift, regulatory arbitrage is one of the three big pillars of blockchain.

[1] https://aws.amazon.com/lambda/pricing/

I'm interested in finance and analytics. So I like to monitor and occasionally write bots to trade crypto currencies on decentralized exchanges in a real world environment. Could I do algo trading without blockchain? I guess but the transparency and tooling of EVM is unmatched, and I don't know the tax and legal consequences of doing it in proper exchanges. Blockchain is the wild west and for someone who is curious and likes to tinker, it's the environment I prefer.

What's the self-hosted lambda alternative for what I want to do?

> [edit] Ah, I see the answer to my question is regulatory arbitrage. Gotcha. Along with crime and grift, regulatory arbitrage is one of the three big pillars of blockchain.

Can we stop with the moral panic? If I live in a state where its a crime to gamble (except for heavily advertised state run lottery that targets poor people), and I am of sound body and mind and want to legally gamble and learn something about probability, psychology and technology in the meantime, why is this a bad thing? Give me a break

No moral panic here, I've got nothing against gambling. I love to gamble. However, crypto is clearly utilized in this case for the trading of unregistered securities via regulatory arbitrage. That's just fact.

Good luck out there, and I hope you win! You'll need it, though, it is after all a mob casino you're gambling in.

This is the classic "I know it's a crooked casino but it's the only game in town" argument. The big issue there is you can't know the odds because the house is playing against you and they can see your hand and they can and do frequently turn the lights off if things start to move against them. This is of course why we register securities and regulate brokerages.

I'm pretty confident we'll recapitulate that in due time.

Gambling and unregistered securities are fundamentally very different things. Gambling is activity where usually house is guaranteed to win, and player is guaranteed to lose.

Unregistered securities are just securities, but not government approved. Generally it is believed that unregulated securities are way more risky. However also government approved securities can be scams or bad investments.

I was curious about the importance of Forbes. It's been linked over 1,000 times on Hacker News: https://hn.algolia.com/?q=Forbes

There are other cheap-to-deploy-on EVM-compatible (I feel like I'm talking about the IBM PC days) blockchains out there that aren't wholly owned by an exchange. Avalanche, Polygon etc.

It is nicer to use in that respect, but isn't it really just a copy of Ethereum with less security?

If you're willing to pay the centralisation price and you're just interested in the technology, you have better options - where at least if there's regulatory issues they haven't come up yet that I know off - with chains like Solana.

I tried Solana and it wasn't nearly as open. Most contracts are closed source and even if you did get the source its difficult to confirm its correct due to a more complicated build process. And the devs don't really care that its closed. I wrote my thoughts about Solana block chain.

I would love some other recommendations though. So far I found Binance Smart Chain to be the most open and easy to navigate.

https://mleverything.substack.com/p/thoughts-on-the-solana-b...

Every major news outlet gets purchased by some rich entity. WaPo by Bezos, Boston Globe by John Henry, Rupert Murdoch with WSJ... this is why it doesn't really matter if they are money-losing operations. Their value for pushing narrative vastly exceeds their P&L

I do agree, but this is particularly egregious. Like "Al Capone takes 20% stake in Chicago Tribune" egregious. Did they not notice the Sicilians when they were negotiating or...

Murdoch actually made his money in media. What makes you think the WSJ would be money-losing?

They don't necessarily have to be, but if I was rich and buying a news operation, profitability is important but I would also want it to push the news that I want.

Weakening the separation between editorial and business interests is a classic mistake. Unless owners of media companies allow the journalists to be independent then they are ultimately damaging the value of their investment.

India as well:

- https://www.businessinsider.in/cryptocurrency/news/cryptocur...

- https://qz.com/india/2108727/india-probes-binances-wazirx-cr...

Malta stands out because they are the host country of many popular gambling websites. Hmm.

List of Forbes scams

https://www.niemanlab.org/2022/02/an-incomplete-history-of-f...

Ah so what you're saying is there's some potential synergies.

There's perhaps no better example of a publication selling its soul for pageviews than Forbes. While Malcolm Forbes was editor, it was my favorite business magazine. Today, they sometimes have decent articles if you can plow through all the popups etc. to read them, but there's a huge amount of content that has very little real editorial oversight.

Previous discussion: https://news.ycombinator.com/item?id=30281041

the 30 under 30, tho

I know of people who have paid to get on that list. That cheapened it for me, and made me see it for what it was...

What was more alarming was that it wasn't even that much money (around 5k USD, I believe).

$5K USD for a chance, I think it's probably closer to $50K for a sure thing, I know a number of people who made the list. Sometimes it comes as part of a VC investment package and is considered part of the marketing spend. Other times it's through (very) personal connections with powerful people. It's not too hard to find out who those powerful people are you just have to do a bit of hustling.

> it's probably closer to $50K for a sure thing

Depends on the list. They print lists like they print names on them. Top 40 under 40 Southeast Asian fintech sales and stuff.

Good point, my info is from the 30 under 30 back in 2013/2014 timeframe before the world split. I know someone who had $100K spent on her but that was a part of a bundle that included a glowing OZY write up and a bunch of other services.

So many of the people there haven’t really done much either.

It’s hard to do anything meaningful career-wise before 30.

Haha, indeed. Many times they've just started a company, and that's it. No proper customers, no real revenue. Just a random, unproven lofty idea and a "brand". Very Theranos like, and similarly doomed to fail.

I personally know people who have made it that just work in a some midlevel (but publicly visible) role at a big tech unicorn, the company just got them placed there as part of their general PR strategy

I've seen that too. The most egregious is when it's someone at a financial institution where the titles are pretty inflated. Being an AVP at Bank of America is not really a flex worthwhile of a 30 under 30 placement.

So how do you do it?

I can’t make any claims to the accuracy of this piece, but found it an interesting read after a colleague of mine was on the list:

https://www.linkedin.com/pulse/how-get-forbes-30-under-hones...

Hire a PR firm to do it for you.

Seems like an especially smart investment. Tycoons purchasing storied media assets usually have to contend with journalistic integrity when trying to push their agenda. Binance will not have any such challenges with Forbes.

Reminded me of Pando, started by a former TechCrunch editor 10 years ago. At the top of the Pando investor: Marc Andreessen and Peter Thiel.

https://gigaom.com/2012/01/16/sarah-lacys-pandodaily-launche...

https://allthingsd.com/20120116/sarah-lacy-debuts-new-tech-s...

It didn't last.

That's smart move by Forbes. Soon FBI might take 100% stake in Binance.

I genuinely laughed.

It seems like after every media, government, celebrity and politician, who can be bought, has been bought, and every sucker pilfered, then this thing will finally come to its horrible end.

I did not think I would experience a bubble that rivals the Dot Com or Mississippi bubbles. But here we are.

Frankly, this is a genius move to wash crypto propaganda in a somewhat reputable aura...

It worries me that it is actually going to work.

A news source these days doesn't need to be accurate. It is sufficient to be well-known.

It makes sense, propaganda to drive crypto scams

Is there a term already coined that's in line with "regulatory capture" [of government and policies by for-profit industrial complexes lobbying to help insert politicians favourable of or inattentive to their industry] but for "brand capture" or "trust/reputation capture" or similar?

Even better, there's one specifically for the corporate capture of journalism: https://en.m.wikipedia.org/wiki/Propaganda_model

There'd have to be existing trust/reputation in order for it to be captured, and in the case of Forbes there isn't any.

Not among people who know something about business or finance, but in the general public the name is still associated with "rich people stuff."

Sort of like the Trump brand...

I think this is closer to reputation laundering.

Then accuse non mainstream sources of "misinformation" when they try to expose the crypto scams.

Fact Check: "No, Bitcoin is not a Ponzi scheme and is actually good for the environment!"

I have a reflexive aversion to reading anything from Forbes. I absolutely hated that "Forbes Welcome" page and it was so difficult to get around in the past.

Forbes is about as a good as business insider. They are really bad journalism. Forbes is only known for its list of wealthy people which is not something I would want to hang my hat on.

Same here, but I feel like Forbes' reputation is at the point where it might actually be improved by Binance's influence.

I have no idea where Forbes reputation comes from. Is it because they were the first to track the richest 100 people? Big brand name, little backing afaik.

It used to be a proper business magazine, alongside Fortune, Barrons and BusinessWeek. At some point in the last 15 years it opened up a "contributor" program, which killed its reputation.

As far as I know, there is still a Forbes print mag with editorial staff, but considering how few people subscribe to magazines now, their reputation rests almost entirely on the quality of the free contributor articles. Most of which are written by content marketers looking to build their brand.

> Most of which are written by content marketers looking to build their brand.

Or content marketers/founders/cryptocurrency hackers like Heather Morgan (https://www.forbes.com/sites/jonathanponciano/2022/02/08/fed...)

> Heather Morgan was a ForbesWomen contributor from July 2017 until Forbes ended the relationship in September 2021, and was never an employee.

Like Time or Sports Illustrated or Newsweek, it was a highly-respected, widely-read magazine for decades. And it was led by Malcolm Forbes, who was a minor celebrity for being wealthy, sort of like Richard Branson.

Forbes used to have a lot of brand appeal, but I don’t honestly know anyone who still takes them seriously. I feel like their contributor program really killed the brand for anyone under 40

That's all. Also, it was owned by a rich guy who would make objectivist pronouncements all the time, and provided an army of worthless pundits for news channels. Eventually baby Forbes was a vanity presidential candidate who did Saturday Night Live.

It certainly wasn't the Huffington Post cesspool the internet turned it into, but like a lot of other print magazines it built its brand on the one big press release and special issue it put out at the same time every year.

no news is bad news to crypto cultists:

crypto exchange reaches new volume = "they are very smart, true geniuses"

fbi dismantles the same exchange = "great it helps crypto ecosystem and weans out fraud"

country of billions of people bans crypto = "this is what crypto was built for"

crypto prices skyrocket = "common people are getting into crypto"

crypto prices crash = "great once in a lifetime opportunity, not a financial advice"

"Binance today has announced that that it knows lobbying has to happen in public opinion as well as back-room deal making"

Crypto is constantly advertised as is. Incrementally, I can’t see a 200m investment paying off. With interest rates rising, speculative investment is going to drop significantly.

Maybe they offered them a bonus, payable entirely in Binance USD stablecoin.

You joke, but stablecoins are well on their way to sustaining crypto-currencies and mainstreaming its adoption.

I think Forbes makes money, so the 200m didn't go anywhere.

How bad of shape is Forbes in to take that money? I mean let's be real, Forbes is a pretty terrible outfit to begin with, this just solidifies it.

The video is worth watching. It seems like the Binance CEO is caught unprepared by the Heather Morgan question.

I'm very concerned that Forbes' role as a bastion of journalistic integrity is under threat

I feel like for them that ship has largely sailed a while ago, sadly. I have a friend of mine who was included in their 30 under 30 list and knowing a bit about that process alone has generally made me really averse to anything else they put out.

/s?

OP comment has to be sarcasm. No other way to read it.

Based on this comments section, all crypto is scams. Compared to what?

Aren't we talking about the finance sector here? It's all a scam, some currencies and markets just have more laws already written than others.

I'm sure xk of seeing this take. If you buy a stock (even Tesla!) There's generally an actual profit making company producing things behind it.

What's the difference between the profits that e.g. Meta earns vs profits that Binanace earns?

This feels like a see change. A stake in as reputable a medium as Forbes?

> [sea] change

FTFY, your native tongue was shining through

$400mil? they print that out of thin air in a single day.

web3.0 is going to suck just like web 2.0 sucked.

I think it will suck even worse.

Crypto is buying good news now.

> Forbes

> Good news

pick one.

I think parent meant buying "good news", as in positive PR, not buying "good" "news".

It doesn't have to be good for a whole bunch of people to assume it's good because it's a previously reputable(ish) physical magazine people have heard of.

Their contributor network thing exists primarily because of the value of the branding confusion.

I think GP meant "good news" as in, publicity.

cant make this shit up. wow.

Did they pay in Tether?

fundus are safu

PR move

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