Binance criticised for ‘cynical’ crypto donations after Morocco earthquake

Please fol­low and like us:
Pin Share

Receive free Binance updates

Binance is fac­ing crit­i­cism over dona­tions of its in-house cryp­tocur­ren­cy to Moroc­can cus­tomers after the country’s dead­ly earth­quake, with human­i­tar­i­an relief experts describ­ing it as a stunt designed to improve the exchange’s image.

The world’s largest cryp­to exchange this week said it would give up to $100 of its BNB token to about 70,000 exist­ing cus­tomers, in a move worth up to $3mn.

But some aid experts have crit­i­cised it for donat­ing tokens rather than read­i­ly usable cash or items such as food and blan­kets that sur­vivors imme­di­ate­ly need. Some also take issue with it help­ing only exist­ing Binance cus­tomers rather than all vic­tims of the dis­as­ter.

Iain Over­ton, exec­u­tive direc­tor of char­i­ty Action on Armed Vio­lence, said the ini­tia­tive looked like a mar­ket­ing ploy designed to show the com­pa­ny in a pos­i­tive light. 

“Those affect­ed by the cat­a­stro­phe will nev­er hear of it, and those unaf­fect­ed by the cat­a­stro­phe may come away with a pos­i­tive notion of [Binance’s] brand. It’s cyn­i­cal at best,” he said.

Binance’s dona­tion is the lat­est attempt by cryp­to firms to use dig­i­tal assets as a way of sup­ply­ing aid to vic­tims of nat­ur­al dis­as­ters or con­flicts, includ­ing after Russia’s inva­sion of Ukraine and the dead­ly earth­quake that hit Turkey and Syr­ia ear­li­er this year.

But such efforts have come under fire for being an inef­fec­tive means of get­ting help to those in need.

Over­ton said: “In post-dis­as­ter envi­ron­ments, most peo­ple are seek­ing the famil­iar. This isn’t a space for dig­i­tal inno­va­tion and new finan­cial tools. What peo­ple want is food, shel­ter, med­ical aid and space to grieve. They’re not look­ing for crypto.”

A spokesper­son for the Inter­na­tion­al Fed­er­a­tion of Red Cross and Red Cres­cent Soci­eties told the Finan­cial Times that aid had to be in a form that would “help [peo­ple] meet their basic needs immediately”.

“If it is cryp­to, do they see that this is some­thing that can help? If I don’t have food and I am in the mid­dle of an earth­quake, is cryp­to going to get me food and clean water right now? That’s what I need,” she said.

Binance’s char­i­ta­ble arm said in a state­ment: “Cryp­to trans­fers can be used to deliv­er urgent finan­cial aid to dis­as­ter vic­tims as they pro­vide fast, low-cost, bor­der­less, and trans­par­ent trans­ac­tions. As need­ed, they can also be con­vert­ed to local fiat cur­ren­cies around the world.” It added that in addi­tion to direct cryp­to dona­tions to users, it would donate fur­ther funds raised from the pub­lic to local charities.

The Moroc­can earth­quake struck last Fri­day and has claimed the lives of at least 2,800 peo­ple and destroyed more than 30,000 homes. The gov­ern­ment called on the pub­lic to donate blood and the army has been brought in to help deliv­er aid and con­duct res­cue operations. 

Binance said in a press release it is iden­ti­fy­ing which users are eli­gi­ble for the funds in the Mar­rakech-Safi province, based on a proof of address mech­a­nism that had to be com­plet­ed by Sep­tem­ber 9. 

Those who could prove their address by the cut-off date are enti­tled to $100 worth of Binance’s native BNB cryp­to token. Those who com­plete the process by the end of the month will receive $25 worth of the token, and “active trans­act­ing” users liv­ing across Moroc­co but not in the affect­ed area are enti­tled to $10 worth of the token.

“We hope we can bring some sup­port to those affect­ed,” said Binance chief exec­u­tive Chang­peng Zhao in a state­ment ear­li­er this week. “For Moroc­can users who receive these dona­tions but are unim­pact­ed by the earth­quake, we ask them to pass the funds on to those most in need.”

How­ev­er, crit­ics not­ed the exchange’s ini­tia­tive has not pro­vid­ed funds that are easy to spend. BNB tokens are not legal ten­der and Binance users will need to con­vert the funds into local cur­ren­cy before with­draw­ing mon­ey from a bank or cash machine.

“I get that they’re try­ing to do a good thing, but ulti­mate­ly it [appears to be] a bit of a PR stunt,” said a man­ag­er at one major aid agency.

An employ­ee of anoth­er agency said: “I hon­est­ly don’t know how Binance would have the infra­struc­ture to be able to mon­i­tor the imple­men­ta­tion of the mon­ey that they’re giv­ing and where it’s going, and to ensure that it actu­al­ly gets to the beneficiary.”

Rory Stew­art, for­mer UK cab­i­net min­is­ter and pres­i­dent of GiveDi­rect­ly, a non-prof­it that lets donors send mon­ey direct­ly to the extreme poor, said his group has to date avoid­ed donat­ing funds in cryp­to because tokens are dif­fi­cult to con­vert into cash to spend, and because the volatil­i­ty of dig­i­tal assets expose the eco­nom­i­cal­ly vul­ner­a­ble to undue risk.

Binance is fac­ing law­suits from key US reg­u­la­tors alleg­ing it has ille­gal­ly accessed US cus­tomers, vio­lat­ed secu­ri­ties laws and mixed bil­lions of dol­lars of cus­tomer cash via a sep­a­rate enti­ty owned by Zhao. 

Binance pre­vi­ous­ly described a Com­mod­i­ty Futures Trad­ing Com­mis­sion law­suit as “unex­pect­ed and dis­ap­point­ing”. It said it was dis­ap­point­ed and dis­heart­ened by a sep­a­rate law­suit filed by the Secu­ri­ties and Exchange Com­mis­sion, which its US affil­i­ate called “base­less”.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published.