Troubled Crypto Exchange Binance’s Controversial Airdrop
The cryptocurrency exchange, Binance, recently announced plans to airdrop its BNB token as disaster relief to users affected by an earthquake in Morocco and floods in Libya. However, this move has sparked a debate, with some experts questioning whether it is a genuine humanitarian effort or merely a marketing tactic.
In two separate press releases, Binance committed to distributing up to $3 million worth of BNB to users impacted by the Morocco earthquake and up to $500,000 in BNB to those affected by the Libyan floods. The distribution criteria are as follows:
- Users who have completed proof of address (POA) checks in Libya and Morocco will receive $100 worth of BNB.
- Users providing POA afterward will receive $25 in BNB.
- All active users, irrespective of location, will receive a $10 BNB airdrop.
While Binance acknowledges the limitations of the POA method, they believe it is the best available way to identify potentially impacted users.
Impact of the Natural Disasters
The scope of the disasters in Morocco and Libya is significant:
- The earthquake in Morocco has claimed over 2,800 lives, affecting 300,000 people.
- The floods in Libya have been even more devastating, with 11,300 casualties and 900,000 people affected.
- Unfortunately, the death toll and the number of affected individuals are expected to rise further.
Binance Charity Initiatives
Binance has also established a public donation address through Binance Charity. The donated funds will be directed to an as-yet-unnamed charitable organization.
Controversy Surrounding the Airdrop
Some aid experts have criticized Binance’s approach for several reasons:
- The aid is exclusively directed towards Binance users, leaving out many disaster-affected individuals.
- Providing BNB tokens instead of essential supplies like food, shelter, and medical aid has drawn scrutiny.
- Experts argue that immediate basic needs should be prioritized in disaster relief efforts.
Binance’s Defense and Rationale
In their press releases, Binance defends its decision by emphasizing the advantages of cryptocurrency, such as fast, low-cost, borderless, and transparent transactions. They claim that crypto can be converted into local fiat currencies when needed, making it a legitimate means of delivering urgent financial assistance.
Challenges and Skepticism
However, aid experts counter that converting crypto into cash during crises can be unnecessarily complicated, and the price volatility of cryptocurrencies may expose disaster victims to additional risks.
Binance’s Ongoing Challenges
Binance, currently facing numerous legal challenges and regulatory probes globally, has been seeking positive public perception. Its executives have been leaving their positions in various parts of the world. Notably, this is not the first time Binance has faced criticism for appearing to prioritize publicity over goodwill.
Previous Controversy with Malta Community Chest Foundation (MCCFF)
In 2021, Binance was sued by the Malta Community Chest Foundation, a charity led by Maltese president George Vella. MCCFF claimed that Binance failed to deliver over $9 million in crypto, primarily in BNB tokens, promised to terminally ill cancer patients in 2017.
Lack of Assurance in Aid Distribution
Despite Binance’s assurances, there is skepticism about whether the airdropped BNB tokens will reach the intended recipients. Some believe that the gesture may serve more as a positive branding opportunity for Binance rather than providing effective aid to disaster victims.
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