In a recent tweet, Changpeng Zhao, the CEO of the world’s leading cryptocurrency exchange, Binance, recently emphasized the potential profits that Binance Coin offers its holders. While a tweet of the kind might appear innocuous, it could also have an impact on the BNB price, given Zhao’s influence on the community, making the entire thing questionable. After all, we’ve witnessed prominent CEOs getting sued for propping up the value of their companies. How long will it be until the crypto industry is similarly scrutinized?
CZ Emphasizes the Value of Holding BNB
It’s safe to say that Binance Coin (BNB) has seen better days. Over the past few months, the cryptocurrency lost almost half of its value, plummeting from its all-time high of around $40 in June to $21.
Interestingly enough, the decline comes amid seemingly massive developments for Binance and its overall ecosystem. Yet, all of that seems to have had no impact on investors.
Against this backdrop, Zhao posted a seemingly controversial tweet today, “warning” people that not holding BNB could be a bad play.
I asked this on Dec 8, 2018, when #BNB reached a low of $4.22. We kept on building, never doubted it. Launchpad released in Jan.
And now, we continue to #buidl, more ferocious than ever. I want to ask this question again.
In the future, don’t say I didn’t tell you. http://t.co/075HkWgqMi
— CZ Binance (@cz_binance) September 14, 2019
While the majority of the text seems like a simple throwback to BNB’s glory days, the last sentence (“In the future, don’t say I didn’t tell you”) is questionable, to say the least. While it’s subject to interpretation, this sounds an awful lot like a warning that not holding BNB is a bad choice. Moreover, interpreted broadly, it could also sound like financial advice. Needless to say, this line of expression is completely unacceptable in traditional financial markets and we’ve already seen the consequences of it.
Standards are Not the Same
While a lot of cryptocurrency proponents are clamoring for regulatory clarity and definitions, it appears that the standards applied to traditional financial markets and the crypto world are a tad different, to say the least.
Back in August 2018, Elon Musk, widely considered to be one of this century’s visionaries as the CEO of SpaceX and co-founder/product architect at Tesla, got into a legal storm with the SEC over a tweet.
Musk said that he’d been considering taking Tesla private and that he had secured the necessary funding. Back then, he was also the company’s chairman.
The SEC took measures immediately, filing charges against the entrepreneur. Despite voicing his disagreement, Musk settled, agreeing to pay a $20 million fine, step down as the company’s chairman, and obtain pre-approval of his tweets from the company’s legal counsel.
In other words, the US SEC takes social media behavior seriously. And it probably should. Apart from being major shot-callers at their respective companies, a lot of the rich and famous CEOs, Changpeng Zhao included, have serious social media followings.
Zhao, for instance, has over 429,000 followers on Twitter. Hence, it’s only natural that his opinions would have influence over the people who read them. As such, it’s questionable at best to use the platform to offer any sort of financial advice, especially that which would impact the price of an asset that one’s company created.
Of course, Zhao is far from the only individual to have done so, even subtly. Justin Sun, TRON’s founder, provides perhaps the best example of such behavior.
After all, we haven’t seen Jeff Bezos directly propping up Amazon’s stock, have we?