Binance CEO CZ’s Net Worth Falls by $11.9 Billion
The co-founder and CEO of Binance, Changpeng “CZ” Zhao, has experienced a significant decrease in his net worth. This decline is attributed to falling trading volumes on the Binance exchange.
Bloomberg Cuts Binance Revenue Estimates
On October 26th, the Bloomberg Billionaires Index reduced Binance’s revenue estimates by 38% due to a slump in exchange volumes. As a result, CZ dropped to 95th place on the rich list.
Sharp Decline in Net Worth
CZ’s net worth now stands at $17.3 billion, marking an 82% drop from its peak of $96.9 billion in January 2022. At that time, he was ranked as the 11th richest person globally.
Binance’s Falling Trading Volumes
Bloomberg calculated Binance’s revenues based on spot and derivatives trading data from crypto data aggregators CoinGecko and Coinpaprika. The exchange’s spot trading market share has been steadily declining, reaching 34.3% as of September compared to over 55% in January.
In addition, Binance.US, the US-based arm of Binance, also experienced record-low volumes last month.
Lawsuits and Regulatory Scrutiny
The decline in CZ’s net worth and Binance’s trading volumes coincides with lawsuits filed by both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC accused Zhao, Binance, and Binance.US of operating illegally, selling unregistered securities, and mishandling customer assets. The CFTC claimed that Binance did not properly register with the regulator.
CZ and Binance have denied these allegations and are seeking to dismiss both lawsuits.
Comparison to Sam Bankman-Fried
CZ’s net worth decline is noteworthy, but it pales in comparison to the fortune loss experienced by his once-rival Sam Bankman-Fried. In November 2022, Bankman-Fried saw his $16 billion fortune effectively wiped out when FTX disclosed its liquidity crisis just days before filing for bankruptcy.
Some believe that CZ’s tweet about selling Binance’s FTX Token (FTT) holdings triggered a wave of withdrawals from FTX, contributing to the crisis. Although CZ initially considered acquiring FTX, he withdrew from the deal within 48 hours.
Hot Take: CZ’s Net Worth Takes a Hit Amid Regulatory Pressure
The recent decline in CZ’s net worth serves as a reminder of the challenges faced by crypto industry leaders under increasing regulatory scrutiny. As lawsuits and regulatory actions continue, the financial landscape for crypto exchanges remains uncertain. The outcome of these legal battles could have significant implications for the future of Binance and its CEO.
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