Binance CEO Changpeng Zhao's Net Worth Plummets by $11.9 Billion Amid Legal Challenges and Declining Trade Volumes
Summary:
Binance CEO Changpeng “CZ” Zhao has experienced a significant reduction in his wealth, down $11.9 billion due to declining trading volumes at his cryptocurrency exchange platform. The platform's revenue projections have decreased by 38%, leading to Zhao's fall to the 95th position on the global billionaires list. His net worth has now experienced an 82% drop from its peak of $96.9 billion in January 2022. These financial troubles are linked to two lawsuits brought against Binance by the US Securities and Exchange Commission and the Commodity Futures Trading Commission for alleged illegal operations, unregistered security sales, and asset mismanagement.
Binance CEO and co-creator, Changpeng “CZ” Zhao, has experienced a significant reduction in his wealth of $11.9 billion as his cryptocurrency exchange experiences low trading volumes. The Bloomberg Billionaires Index on 26th October decreased the revenue projections for Binance by 38% due to a decline in trading volumes. Consequently, Zhao fell to the 95th position on the list of billionaires. Currently, Zhao’s net worth stands at $17.3 billion, an enormous fall of 82% from its peak of $96.9 billion in January 2022 when he was 11th among the richest individuals globally. His net worth reached its peak in early 2022 before falling along with the cryptocurrency market, as reported by Bloomberg. Using data from CoinGecko and Coinpaprika, which are cryptocurrency data aggregators, Bloomberg’s index computed the earnings from Binance’s derivatives and spot trading. Up to September, the spot trading market-share of the exchange had decreased for the seventh month consecutively to 34.3%. In contrast, Binance’s spot market-share was beyond 55% in January. Binance.US which is Binance’s arm in the United States, also experienced new lows in its volumes last month. Zhao’s sharply falling net worth and the declining trading volumes at Binance follow two lawsuits brought against them by the US Securities and Exchange Commission and the Commodity Futures Trading Commission. These institutions sued Zhao, Binance and Binance.US alleging that the exchanges were operating illegally, mismanaging client assets and selling unregistered securities. Zhao was named as the controlling person in these charges. The lawsuit brought by the CFTC in March alleges that Binance did not appropriately register with the regulator. Both Zhao and Binance oppose these allegations and are seeking to have the lawsuits dismissed. This recent fall in worth is less severe when compared to that of Sam Bankman-Fried, once a rival to CZ. Bankman-Fried lost almost all of his $16-billion wealth in November 2022 after FTX revealed its lack of liquidity only days before announcing bankruptcy. Some are of the belief that this crisis was triggered by a tweet from CZ announcing that Binance was disposing of its FTT Token (FTT) holdings leading to massive withdrawals from FTX. Zhao initially chose to buy the struggling exchange but opted out less than 48 hours later. Bankman-Fried was in court in his own criminal trial on 26th October where he pleaded not guilty to two counts of fraud and five counts of conspiracy.
Published At
10/27/2023 5:17:00 AM
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