Binance backs Elon Musk’s Twitter takeover bid with $500 million

Binance, the world’s largest cryptocurrency exchange, has pledged $500 million to Elon Musk’s $44 billion bid to acquire Twitter, according to an updated 13D filing with the SEC.

Binance CEO Changpeng Zhao took to Twitter to share the news, calling it “a small contribution to the cause.”

That sum is simply a blank check, CEO Changpeng Zhao told the Financial Times on Thursday. Zhao quickly decided to dedicate $500 million to the deal without even hearing a business plan from Musk, he said.

“We, from our friends, heard that Musk was looking for outside investors, and were we interested?” he related to the British newspaper. “We immediately said yes. He didn’t have a plan for Twitter. There’s no, like, business plan. So it wasn’t that kind of discussion.”

“We hope we can play a role in bringing social media and Web3 together and expand the use and adoption of crypto and blockchain technology.”

Zhao told the Financial Times that Binance will support Musk however he chooses to use the funds and is especially excited about the potential for a cryptocurrency tie-up with Twitter.

The filing indicates that Sequoia Capital ($800 million), Andreessen Horowitz ($400 million), Qatar Holding ($375 million), Fidelity ($316 million), DFJ ($100 million) and other notable investors also committed funds to the Tesla chief’s acquisition plans. The largest investor, Larry Ellison, contributed $1 billion.

Total backing is approximately $7.1 billion from this list of investors.

A Schedule 13D must be filed with the SEC whenever an entity, in this case Musk, acquires more than 5% of a company.

Elon Musk, Twitter and cryptocurrencies

Given that most of the cryptocurrency chatter is happening on the social media platform, it’s no wonder that Web3 enthusiasts have been closely following Musk’s move to acquire Twitter.

While it’s still unclear what exactly Musk has planned for Twitter, he has already hinted at plans to make the site more cryptocurrency-friendly, including accepting the meme-inspired dogecoin token as a payment method.

“I think this bodes well for how Twitter, as a private organization, can be more nimble in terms of servicing these growing ecosystems, whether it’s cryptocurrency or other new technologies,” said Michael Sonnenshein, CEO of cryptoasset manager Grayscale

The acquisition saga began on April 4, with Musk first buying a 9.2% stake in the company. Shortly thereafter, he joined the company’s board of directors (only to resign from the position a few days later).

Eventually, he made an offer to buy the company for an initial $43 billion. And on April 25, Twitter eventually accepted the slightly higher offer of $44 billion.

“Free speech is the foundation of a functioning democracy, and Twitter is the digital town square where issues vital to the future of humanity are debated,” Musk said in a statement after the offer was accepted, adding, “Twitter has tremendous potential – I look forward to working with the company and the user community to unlock it.”

Brian Armstrong, CEO of Coinbase, also chimed in, saying that “Elon‘s purchase of Twitter is a huge win for free speech, and will likely change the trajectory of the world more than most people realize.”

As for Musk’s exact plans to unlock Twitter’s “tremendous potential,” he has suggested introducing an edit button, making Twitter’s code open source and eliminating the spambots that plague the platform.

It may also mean the platform will continue to add more crypto-native tools.

The idea of integrating more crypto components is especially important for Dogecoin holders, as the world’s richest man has also become something of a face for the popular canine cryptocurrency. During a TED event on April 14, he hinted at the possibility of adding DOGE for payments on Twitter’s premium subscription service Blue.