By
Tolu Ajiboye
April 23rd, 2024
The likelihood that Berkshire Hathaway is going to invest in Binance is considered very slim as Binance is reportedly under the radar of authorities in the United States.
A major point of conversation on crypto Twitter is that Binance Exchange, the world’s largest digital currency brokerage by daily trading volume is in talks with Warren Buffett’s Berkshire Hathaway Inc Class A (NYSE: BRK.A) for some equity funding.
Self-proclaimed “Engaged Value Investor” Mike Alfred broke the news on Twitter citing a source he claimed was a “fund manager closely connected to one of the earliest investors in Binance.”
Considered one of the biggest critics of Binance and its Chief Executive Officer Changpeng “CZ” Zhao, Alfred said his source confirmed to him that “Binance is in active discussions with potential new “Keystone” investors, including Warren Buffett‘s Berkshire Hathaway, about an equity round that would provide support and credibility to the company.”
serve as a "decentralized CFO" according to the company.
2. Binance is an active discussions with potential new "Keystone" investors, including Warren Buffett's Berkshire Hathaway, about an equity round that would provide support and credibility to the company.
— Mike Alfred (@mikealfred) December 22, 2022
Since FTX imploded, Binance has come under intense scrutiny as many believed the collapse of the trading platform may be a signal of ill health for bigger exchanges to also go under. Binance spearheaded the publishing of Proof-of-Reserves (PoR) in November and despite its attempts to show transparency, the community faulted the fact that the trading platform did not publish any form of debt or liabilities which makes its proofs faulty.
Since FTX’s file for bankruptcy, the questions surrounding the integrity of Binance’s internal operations have grown and this accounts for the need to secure a high-profile investor like Berkshire Hathaway to prop up its image.
According to Alfred’s anonymous source, Binance has no centralized Chief Financial Officer (CFO) and that about 20 people working in the company’s Treasury are designated as decentralized CFOs. The FUD surrounding Binance’s operations has weighed down the trading platform in terms of volumes processed, and the valuation of BNB has plunged by 15.2% over the past 14 days.
Is There a Likelihood of Berkshire Hathaway Investing in Binance?
This remains a major question on the minds of many on Crypto Twitter as Warren Buffett is known to be a major critic of Bitcoin and the crypto ecosystem as a whole.
The likelihood that Berkshire Hathaway is going to invest in Binance is considered very slim as Binance is reportedly under the radar of authorities in the United States. This will not only make the American conglomerate refrain from furthering conversations with the trading platform.
A major point raised by some observers is the fact that CZ may be unwilling to open up Binance’s books for the kind of scrutiny that external investors like Berkshire Hathaway will require to place a bet on the company.
While the impossibilities have been highlighted, chances are that Berkshire Hathaway may also inject some funds using one of its Venture Capital offshoots.
Berkshire Hathaway is building a history of investing in crypto-based companies. The company invested as much as $1 billion in the crypto financial institution, Nubank, carving out the premise that if it can invest in Nubank, it can also inject funds into Binance or any of its entities.