Changpeng "CZ" Zhao, CEO of Binance, gave an explanation of 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 bring Twitter into Web3" in the future.
"I believe Twitter has not been monetized well - it has not grown well, there's many tactical problems like bots that spam my comments, there's scammer accounts on there, it's not been run well," CZ said. "But I think the platform has huge value in itself, and especially now with Elon at the helm, we're very confident."
CZ made the remarks on a CNBC Squawk Box episode on Oct. 31, where he explained why he and Musk decided to invest in the social media platform.
Binance's $500 million investment in Twitter places it as the fourth-largest shareholder in the social media site, trailing only 19 other investors.
Binance has maintained its support for Musk's takeover of Twitter from its initial announcement in May 2022. Sequoia Capital Fund, Fidelity Management, and Research Company are among the other co-investors.
The Binance CEO stated that Twitter's challenging price valuation had no impact on their investment choice because they saw long-term prospects as solid, while also giving crypto a "seat at the table" when it comes to free speech:
"We're long-term investors, we believe in strong entrepreneurs, we believe in strong platforms, we believe in free speech [...] we look at this from a 10, 20, 50, 100-year basis, so a little price fluctuation on a monthly basis doesn't bother us."
However, Musk won't be making the decisions about which Twitter accounts are reinstated; instead, a new "content moderation council" will be in charge of making those decisions.
The multibillionaire businessman did, however, affirm in a tweet that the council will use its discretion while considering "widely diverse viewpoints."
CZ claims that it made the investment because it wants to contribute to Twitter's eventual move to Web3, such as by enabling cryptocurrency-based payments on the social media platform.
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 Oct. 28.
The new team will investigate how to create on-chain solutions to problems such as spam bot accounts.
Twitter is also no longer a publicly traded company having been delisted from the New York Stock Exchange (NSYE) on Oct. 28 as a result of Musk's decision to take the firm private.
