BINANCE JUMPS ON THE MUSK WAGON — POLITICO’s Sam Sutton sends this dispatch to MM on the big news last week that Binance is chipping in $500 million to back Elon Musk’s Twitter acquisition: “Considering that Twitter has long been a megaphone for some of crypto’s top evangelists — and a grassroots tool for those pushing Washington on digital asset policy — Musk’s intentions have resonated with Binance founder Changpeng ‘CZ’ Zhao. “‘There’s a very strong mission alignment,’ Zhao said in a video released by Binance on Saturday, adding that he viewed the investment as an opportunity to help Twitter modernize its platform for Web3, a loosely defined term that refers to the next generation of the internet. ‘I hope to see other crypto players fund more key platforms in society. I think that’s important for the industry to grow.’” That latter point matters just as much as the former. “Twitter is vital to crypto’s information ecosystem. It’s where founders hawk tokenized startups, anonymous sleuths air out possible frauds and communities form around blockchain-based decentralized networks. It’s also where top players, including Musk, Zhao or Square CEO and Twitter co-founder Jack Dorsey, can flex their political muscles with their followers – Washington policymakers got a taste of this during last year’s debate over infrastructure bill language. “In that sense, Binance’s investment in Twitter is a signal to its very-online users about Zhao’s views on the practical application of digital assets for traditional internet companies. “‘[Zhao’s] got a following, a cult following (that has pejorative connotations to it), but people really see this guy – in his company, in his Twitter followers – as someone who is leading people somewhere,” said a source close to the company. “He’s got views on a ton of different things; including how people consume their information.’ “It’s not Zhao’s first foray into the information game either. Binance took a $200 million stake in Forbes earlier this year and is also the primary owner of CoinMarketCap — a widely used data website that tracks digital asset prices across hundreds of crypto exchanges. With Twitter, Binance could help build blockchain-based tools that could reduce the influence of bots, spam accounts or scammers who have flocked to the platform to tout shady crypto projects, according to the exchange’s Chief Communications Officer Patrick Hillmann. “'We're looking at this as an R&D investment. It's not a commercial interest for us in a traditional manner where we're looking to put in ‘this’ amount of money we expect to get ‘these’ returns,’ Hillmann said in an interview. `We think this is going to be one of the greatest laboratories that the Web3 industry will ever have access to to start to actually test some of these theories we have – and we thought it was too important to pass up.’ “With that said, there’s also no guarantee that Binance’s aims would align with those of the other investors bankrolling Musk’s acquisition — a roster that includes the venture firm Andreessen Horowitz, Fidelity, Qatar’s sovereign wealth fund and Oracle co-founder Larry Ellison — or if Musk himself will heed the crypto exchange’s suggestions. “'[Elon] has been very clear that this is his project and that our investment in this is to come in and to have a seat at the table and to be able to make suggestions,' Hillmann said. 'But in the end, he will be the decision maker.'” GOLDMAN STEPPING BACK FROM THE SPAC GAME — Bloomberg’s Sridhar Natarajan and Ruth David: “Goldman Sachs Group Inc. is pulling out of working with most SPACs it took public, spooked by new liability guidelines from regulators and throwing into doubt the fate of billions raised for those blank-check vehicles. The Wall Street giant, the second-biggest underwriter of special purpose acquisition companies last year, has been telling sponsors of the vehicles it will be ending its involvement, according to people with knowledge of the matter” SEC EXTENDS COMMENT PERIOD ON CLIMATE RULE, REOPENS COMMENTS ON OTHERS — Our Sam and Katy O’Donnell: “The SEC is extending the comment period for its proposed climate disclosure rule from May 20 until June 17, the agency said Monday. It will also reopen the comment periods for 30 days for proposed rules on private fund investor protections and alternative trading systems.” As SEC Chair Gary Gensler noted in a statement, the three rules have drawn significant interest from a wide group of investors, market participants and other stakeholders, including a bipartisan group of lawmakers, who pushed the agency for more time to comment on the complex proposals. It may seem small, but it’s an important win for them. SURGING MORTGAGE RATES ADD TO BIDEN’S ECONOMIC WOES — Our Katy O’Donnell: “One of the pillars of the Biden economy is in danger of going wobbly. Mortgage rates are surging at the fastest pace in 40 years, threatening to push homeownership out of reach for many Americans and to deprive consumers of potentially billions of dollars in spending power as the home-refinancing wave fades. “While a softening market may help tamp down skyrocketing housing prices, the rising rates mean fewer Americans will be able to build wealth through homeownership.” FIRST IN MM: BIPARTISAN CALL FOR FASTER ACTION ON SHELL COMPANIES — Victoria again: “Six senior senators have urged Treasury Department leadership to act faster to implement a sweeping shell company crackdown that still has not been finalized despite being mandated by Congress early last year. “‘Vladimir Putin’s invasion of Ukraine has only amplified the importance of the [new law],” wrote the bipartisan group of lawmakers in a letter Monday led by Sen. Elizabeth Warren (D-Mass.).
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