Binance provides crypto aid to Libya flood victims amidst controversies over possible PR motives

Following the devastating floods in Libya, global cryptocurrency company Binance has announced its plan to provide critical financial aid to victims. Binance’s initiative includes an airdrop program of up to $500,000 in BNB to users residing in the affected region. 

Key details

• Users who have completed their proof of address (POA) before September 11 will receive $100 worth of BNB tokens sent directly to their Binance accounts.  
• Existing users who complete their POA after September 11 but before September 30 will get a chance to receive $25 in BNB, while active users across Libya will get $10 in BNB.  
• Binance began the distribution of funds to these identified users on September 13 and hopes to support approximately 13,000 people with these efforts.  
• The floods in Libya have killed 11,300 people and have affected 900,000 so far.

Aid controversies 

• Binance recently carried out a similar aid scheme for victims of the Morocco earthquake. However, some critics have questioned the act and labeled it a publicity stunt.  
• While some aid experts argue that the victims of such disasters need readily available items like cash, food, or shelter instead of crypto, others claim that Binance is only helping existing users rather than the real victims of the disasters.  
• A spokesperson for the International Federation of Red Cross and Red Crescent Societies told the Financial Times that aid needs to come in a form that can “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 response  

• Binance defended its decision by saying that crypto transfers are a more efficient and effective method of delivering financial aid and support to victims of natural disasters.  
• It claims traditional banking systems encounter challenges after these disasters that leave people without access to essential funds for necessities like food and medical supplies.  
• “We hope we can bring some support to those affected. 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,” CZ said in a statement earlier this week.  
• If anything, this indicates that the relief fund is not guaranteed to reach the intended victims.  

Zoom out  

• Binance is currently embroiled in regulatory probes globally.
• The Changpeng Zhao-owned exchange is presently facing lawsuits by the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission. 
• In a circular issued in June, Nigeria’s SEC declared Binance illegal, warning citizens about risks in crypto investments and potential loss of funds.