Binance co-invested $500 million into Elon Musk’s Twitter

    Deepak Tyagi
    Deepak Tyagi
    Published on November 1, 2022 7:08 PM

    Updated on January 26, 2023 8:22 AM

    CZ claims that it made the investment to Twitter's eventual transition into Web3,by enabling cryptocurrency-based payments on the social media platform
    Binance co-invested $500 million into Elon Musk’s Twitter

    Binance sees excellent long-term potential in Twitter

    Changpeng "CZ" Zhao, CEO of Binance, explained the $500 million co-investment into Elon Musk's Twitter, citing the possibility for monetization, the freedom of speech in the cryptocurrency ecosystem, and the chance to "help push Twitter into Web3" in the future.

    In a CNBC Squawk Box segment on October 31, CZ made the following remarks about the motivations behind his joint investment with Elon Musk to purchase the social media platform:

    "I think Twitter hasn't been monetized well, it hasn't grown effectively, there are a lot of operational issues like bots that spam my comments, fraudster accounts there, and it hasn't been administered correctly."

    "But I believe the platform has enormous value in and of itself, and especially now that Elon is in charge, we are extremely optimistic," he continued.

    Since it initially made its support known in May 2022, Binance has remained steadfast in its stance in favor of Musk's purchase of Twitter. Sequoia Capital Fund, Fidelity Management, and Research Company are a few additional co-investors.

    The CEO of Binance claimed that despite Twitter's challenging price valuation, the company's investment choice was unaffected since it saw excellent long-term potential while also offering cryptocurrencies a "place at the table" for free speech:

    "We are long-term investors who support strong entrepreneurs, powerful platforms, and free speech. Since we view this from a 10, 20, 50, or 100-year perspective, a small monthly price fluctuation doesn't worry us."

    Musk stated that a new "content moderation council" will decide which banned user accounts are reinstated. Therefore the choice of which Twitter account is reactivated won't be in his hands.

    Cryptocurrency as a form of payment

    The multi-billionaire businessman did, however, affirm in a tweet that the council will use its discretion while considering "widely diversified opinions." According to CZ, it invested in helping Twitter eventually make the switch to Web3, such as by enabling cryptocurrency-based payments on the social media platform:

    "We want to help solve those urgent difficulties like billing for memberships [...] that can be done very easily by using cryptocurrency as a form of payment," the statement reads.

    The cryptocurrency exchange intends to establish a special team to work on future blockchain- and cryptocurrency-based Twitter solutions, according to a Reuters article from October 28. The new unit will investigate how to create on-chain remedies for problems like spam bot accounts.

    Twitter is no longer available for trading

    The fourth-largest shareholder in the social media site among 19 investors is Binance, thanks to their $500 million investment in Twitter. Since being delisted from the New York Stock Exchange on October 28 due to Musk's decision to take the firm private, Twitter is no longer a publicly traded corporation and is no longer available for trading.