Binance CEO Meets With Autocrat, Announces Togo Project
Many blockchain enthusiasts like to describe the technology as a tool that will allow users to seize self-determination. Meanwhile, one blockchain firm appears poised to play ball with Faure Gnassingbé, who is widely considered to be a dictator.
Two days after announcing that cryptocurrency exchange Binance would, along with partners, « support Uganda’s economic transformation and youth employment through blockchain, » CEO Changpeng Zhao took to Twitter again to share some news regarding the company’s plans for another African state: Togo.
Binance and the Gnassingbé Government
One post read, « to embark a new journey for Africa to embrace the 4th industrial revolutions for the youth. The aim of the project is to create thousands of jobs and brings billions of investments to Togo. »
A few minutes later, another followed, which stated, « This is a physical letter signed by the Prime Minister of Togo, hand delivered to us minutes before we stepped onto the plane, from a meeting merely a day ago. » (The image, no longer available on Twitter at press time, is reproduced and translated below.)
The letter mentioned a proposed partnership through which Binance and the Togolese government would « engage Togo in the fourth industrial revolution » by « developing training programs for the youth to create many jobs for them and attracting important investments. »
Considering that news of this partnership follows at least one meeting between Zhao and Togo’s president, and in light of Zhao’s suggestion that Togo could receive billions of dollars’ worth of investments as a result, it seems quite likely that Binance’s activities in the country will have an additional effect: propping up the presidency of Faure Gnassingbé. This is because, as a partner on the project, the government will presumably have some discretion over at least some of the associated funds.
The Political Context
Togo, a small country of under 8 million, has been under Gnassingbé rule for over 50 years, beginning with a military takeover in 1967 by Gnassingbé Eyadéma, who held power (at least in part through the use of violence) until his death from a heart attack in 2005.
During the power struggle that ensued after his death, some 400 to 500 were killed and thousands of others were injured, according to UN figures, and Togolese refugees in neighboring Ghana and Benin came to number over 30,000.
In the end, the late president’s son Faure emerged as the new head of state.
2017 saw a renewed wave of protests, with demonstrators calling for Gnassingbé’s resignation and the reinstatement of the 1992 constitution, which placed a two-term limit on presidents. After more than 10 years in power, Gnassingbé appeared intent to follow the example of his father, who had scrapped the law and remained in office in spite of the limit. Demonstrations continued after it was proposed that the term limit be applied to Gnassingbé’s presidency beginning in 2020, which would have allowed him to stay in power until as late as 2030. « Hundreds of thousands » of protestors reportedly participated.
In July, before anti-Gnassingbé actions had reached a fever pitch, the government financed a juju ceremony intended to appease the spirits of activists who had been killed over the years, including, apparently, some 28 individuals slain in the early 1990s. According to one participant, the ritual aimed to ensure that « human blood [would] not flow again » in Togo. The statehad previously used cash to compensate some victims of political violence.
In one indication of public ire, dozens of women at a September rally in Lomé bared their breasts and/ or dragged their buttocks across the ground, tactics that were meant to « curse » the opponents of their movement.
Around the same time, internet access and text messaging were blocked in the country, and a few weeks later, WhatsApp users in Togo found themselves unable to access the messaging platform, which is popular in parts of West Africa. In February 2017, a government regulator had ordered two media platforms to cease broadcasting, ostensibly for failing to meet licensing requirements, in a move that Amnesty International reportedly called « an attack against freedom of speech. »
At least 11 people died as a result of political violence in the country in 2017, including a nine-year-old child and two soldiers. Toward the end of the year, hundreds of Togolese once again sought refuge in Ghana.
ETHNews was unable to confirm the authenticity of social media reports, accompanied by gory images, which claim that government violence against protesters has continued through April 2018.
Why the Partnership Matters
In some cases, regimes lacking widespread popular support have been able to maintain power through cash injections from outside business interests. Though Zhao has predicted that Binance’s work in Togo will be a boon to the country’s population, his assessment is not likely to sit well with those Togolese who have been clamoring for an end to the decades-long Gnassingbé dynasty.
The majority of commenters who responded to Zhao’s Togo tweets rhapsodized over the announcement. Considering that crypto enthusiasts are known, among other things, for their disdain for autocratic authority, this reaction appears uninformed at best and hypocritical at worst.
Mr. President Director General,
I would like, in the name of the president of the republic and of the government, to thank you for the visit that you wanted to make to Lomé between the 18 th and 21st of April. This visit has allowed us to discover the opportunities that your firm, Binance, can offer.
Indeed, following the will of the head of state, the Togolese government has engaged in a vast reform program aimed at creating many jobs, as well as wealth, to improve the people’s wellbeing in a lasting way.
It is against this background that Togo wishes to establish a partnership with your company, Binance, with an eye to supporting the economic transformation of our country and bolstering the economic autonomy of young people and women, especially through the use of blockchain technology.
The goal will be to resolutely engage Togo in the fourth industrial revolution in the wake of the digital revolution. Specifically, this partnership will involve developing training programs for the youth to create many jobs for them and attracting important investments.
Also, I would like to kindly ask that you submit to us, along with our teams, documentation that explains and allows us to assess your vision for this training and this partnership.
In reiterating my sincere thanks, I ask you to accept my warmest regards.
Komi Sélom Klassou [Prime Minister of the Togolese Republic]
Translations by the author.
The company was founded in China but moved its servers and headquarters out of China and into Japan in advance of the Chinese government ban on cryptocurrency trading in September 2017. By March 2018 the company had established offices in Taiwan.
As of January 2018 it was largest crypto-exchange with a BNB market capitalization of $1.3 billion.
In March 2018, Binance had announced its intentions to open an office in Malta after stricter regulations in Japan and China.
Binance CEO, Changpeng Zhao, founder of the world’s largest cryptocurrency trading platform Binance has been sued by a unit of Sequoia Capital, a VC firm after the negotiation deal regarding the exchange fell through between the two.
Binance CEO, Changpeng Zhao in legal trouble
Changpeng Zhao, the founder and CEO of the top cryptocurrency exchange, Binance has been stricken down with a lawsuit by a unit of Sequoia Capital. According to the court filings in Hong Kong on March 26 and April 24, the legal dispute between both the companies has been over a funding deal regarding the exchange gone wrong that brings an insight into the growing startup that shot to success in little time.
Binance, a cryptocurrency trading platform that was started just nine months ago by Zhao stands out with its overnight success story. In just a few months, the startup has been transformed into the world’s largest and number one cryptocurrency exchange by trading volume as per Coinmarketcap.
Zhao, who featured on the cover of Forbes magazine in February and has a personal fortune worth around $2 billion took Binance to great heights.
Sequoia sues Zhao over fallen exchange deal
As per the court filings, the negotiation of the Binance’s investment terms began in August between Zhao and Sequoia that would have valued the exchange at $80 million approximately while giving Sequoia an 11 percent stake in Binance. Over the next few months, when the cryptocurrency prices soared with bitcoin at its peak, the talks continued between the two companies.
However, in mid-December, Sequoia has been told by the Zhao team that the existing shareholders of the team believe the proposed deal was undervalued. About the same time, Zhao was approached by another Venture Capitalist (VC) firm, IDG Capital that offered two rounds of funding at $400 million and $1 billion.
Now, the problem is if Zhao’s conversation with IDG capital regarding the exchange deal violates his exclusivity agreement with Sequoia. Though Zhao and Sequoia planned to settle the dispute in arbitration, the issue became public when the latter went to the High Court of Hong Kong and secured a temporary directive that bars Zhao from negotiating with any other investors.
There has been no response from either of the side while IDG Capital says it has no relationship with the firm.
Last month, Binance captured the attention of Japan’s regulatory body FSA regarding licensing requirements as part of authorities’ strict control over cryptocurrency exchanges.
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