Binance CEO Changpeng Zhao’s crypto empire has seen an over 80% drop since its peak in January 2022, when it had a valuation of nearly $97 billion.
The drop in trading volumes at Binance, the cryptocurrency exchange co-founded by CEO Zhao, has resulted in his net worth decreasing by $11.9 billion.
On October 26th, the Bloomberg Billionaires Index reduced Binance’s revenue estimates by 38% due to the decline in trading volumes. This led to a significant decrease in the company’s valuation, and Zhao’s ranking on the list of the world’s richest people dropped to the 95th place.
In January 2022, Zhao was the 11th richest person globally, with a net worth of $96.9 billion. However, since then, his net worth has declined by 82%, leaving him with a substantially lower net worth of $17.3 billion.
Bloomberg’s index relied on data from CoinGecko and Coinpaprika, two crypto data aggregators, to estimate Binance’s revenues from spot and derivatives trading.
From September 2022 to January 2022, Binance’s spot trading market share consistently declined, falling from over 55% to 34.3%.
Last month, Binance.US, the United States branch of the exchange, also faced a decrease in trading volumes.
Zhao’s diminishing net worth and Binance’s reduced trading volumes coincided coincide with two lawsuits filed by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In June 2022, the SEC filed a lawsuit against Zhao, Binance, and Binance.US, alleging that the exchanges were operating illegally and selling unregistered securities. Additionally, the SEC accused Zhao of being a “controlling person” in the alleged illegal activities.
The CFTC filed a lawsuit against Binance, asserting that the exchange failed to register with the CFTC, and is seeking to have the suit dismissed. Zhao and Binance have denied the allegations and are pursuing the dismissal of the lawsuits.
Binance’s recent losses contrast with the dramatic downfall of Sam Bankman-Fried, whose $16 billion fortune was eradicated in November 2022 following the collapse of FTX, his cryptocurrency exchange.
Some attribute the crisis to CZ’s announcement that Binance was divesting its FTT holdings, triggering a wave of withdrawals from FTX and ultimately leading to its collapse.
Initially, CZ intended to rescue FTX, but he later opted against the deal less than 48 hours later.
As part of his criminal trial on October 26, Sam Bankman-Fried was summoned to testify, as he faced charges of fraud and conspiracy. Bankman-Fried has pleaded not guilty to the conspiracy and fraud charges.
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