Binance’s CEO and co-founder Changpeng Zhao, commonly known as CZ, has recently experienced a significant decline in his net worth, witnessing a staggering $11.9 billion reduction. This downturn is a consequence of the plunging trading volumes on his exchange, Binance. As per the latest Bloomberg Billionaires Index update, Binance’s revenue estimates were revised down by 38%, causing Zhao to slide down to the 95th spot on the list of the wealthiest individuals globally.
Currently, Zhao’s net worth stands at $17.3 billion, representing an 82% decrease from its peak of $96.9 billion in January 2022, when he held the 11th position among the world’s richest people. The decline in Zhao’s fortune aligns with the general downturn observed in the cryptocurrency market.
Binance’s revenues were calculated based on spot and derivatives trading data gathered from prominent crypto data aggregators like CoinGecko and Coinpaprika. Notably, Binance’s market share in the spot trading sector experienced a persistent decline over several months, dropping to 34.3% in September, compared to its peak of over 55% in January.
The dwindling trading volumes on Binance and its US-based arm, Binance.US, have been exacerbated by the legal challenges posed by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC lawsuit, filed in June, alleges that Binance operated unlawfully, engaged in the sale of unregistered securities, and mishandled customer assets, with Zhao being identified as the “controlling person.” Similarly, the CFTC claimed in March that Binance had not properly registered with the regulator. Zhao and Binance have vehemently denied the allegations and are seeking dismissal of both lawsuits.
Contrastingly, Zhao’s fortune slump appears minor when compared to the fate of his former crypto rival, Sam Bankman-Fried. Bankman-Fried saw his $16 billion fortune essentially wiped out in November 2022 following FTX’s revelation of a liquidity crisis, which eventually led to its bankruptcy filing. This crisis was purportedly initiated by a tweet from CZ announcing Binance’s decision to sell its FTX Token (FTT) holdings, triggering a wave of withdrawals from FTX. Despite initially moving to acquire the embattled exchange, Zhao withdrew from the deal less than 48 hours later.
Bankman-Fried recently appeared in court for his criminal trial, where he has previously pleaded not guilty to two counts of fraud and five counts of conspiracy.
