The rise of Binance, the world’s largest crypto exchange, seems like a script from a Hollywood blockbuster. A dramatic mix of success, existential threats, and alleged fraud. But amid all the turmoil, an unexpected story emerges. An investigation by Forbes, aided by crypto forensic firms, paints a picture of an ICO that was not as successful as it seemed.
A Rocky Start
Despite the widespread belief, Binance’s ICO in 2017 was less than triumphant. Their intent to sell 100 million BNB tokens fell short, with records indicating that only 10.78 million BNB tokens were actually transferred to public investors. Contrary to the proclaimed $15 million raised, the real figures seem to be closer to $5 million.
A Silver Lining
What could be perceived as an early failure turned into a golden opportunity for Binance’s founders, including Changpeng Zhao, better known as C.Z. By September 2018, instead of the initially planned 80 million, the founders possessed 145 million of the minted BNB tokens. Though these unsold tokens were initially valued at less than $10 million, they now hold a staggering worth of approximately $14 billion. This unexpected boon has played a pivotal role in cushioning the platform during the ongoing crypto winter, with BNB losing 68% of its peak value since May 2021.
Regulatory Shadows
With lawsuits looming from the U.S. Securities and Exchange Commission and the Commodities Futures Trading Commission, Binance’s future remains uncertain. The allegations, including deceiving regulators and fraud against customers, combined with dwindling trading volumes, paint a grim picture. Furthermore, the sudden decision by payment processor Paysafe to halt euro transactions for Binance and the exodus of key employees has only added fuel to the fire.
A World of Crypto Secrets
The crypto universe, notorious for its opacity, has allowed many such tales to remain hidden. With no regulatory watchdog like the SEC overseeing Initial Coin Offerings, events such as Binance’s alleged unsold tokens can go unnoticed. Yet, while Binance’s journey from its ICO to its current stature is peppered with challenges, the value they’ve amassed from the unexpected windfall of their BNB tokens is undeniable.
As the crypto world continues to evolve and mature, the Binance saga serves as a testament to the unpredictable nature of the industry, where fortunes can be made and lost in the blink of an eye. But it also underscores the importance of transparency and accountability in a domain still finding its feet.
