In the world of cryptocurrency, Binance founder Changpeng Zhao, also known as CZ, recently faced a substantial decrease in his net worth. The Bloomberg Billionaires Index reported a 38 percent reduction in its estimate of revenue at Binance, a major cryptocurrency exchange, due to declining trading volumes this year. This development led to a notable decrease of $11.9 billion in Changpeng Zhao’s fortune, which dropped to $17.2 billion.
As of the latest update, Changpeng Zhao’s net worth has rebounded slightly to $18.3 billion, placing him as the 88th richest person globally according to the Bloomberg Billionaires Index.
It’s worth noting that Changpeng Zhao played a role in the events that led to a significant legal case against Sam Bankman-Fried, who was found guilty of defrauding customers through his now-bankrupt crypto exchange, Alameda Research.
The downfall of Binance’s revenue is linked to a decline in trading volumes, as reported by crypto-tracking services Coingecko and Coinpaprika. Earlier in the year, Binance managed to capture a peak of 62 percent of total on-exchange cryptocurrency trades in the first quarter, partly due to a zero-fee promotion for popular trading pairs. However, after the promotion ended, Binance’s market share slipped to 51 percent by the end of the third quarter, as reported by research company CCData.
Binance has also been facing increased regulatory scrutiny, as the Securities and Exchange Commission sued the exchange in June, and the Commodity Futures Trading Commission initiated action against it for allegedly shirking rules that allowed U.S. users to access the platform. The regulatory officials claimed that Binance lacked sufficient money-laundering controls, inflated trading volumes, and mishandled client assets. Binance, however, has disputed these allegations and is currently defending its position in court.
Notably, in June, Bloomberg’s wealth index reduced the valuation of Binance’s U.S. exchange to zero after it announced it would no longer transact in dollars, resulting in a significant drop in trading volumes. Binance US had previously been valued at $4.7 billion in a funding round in March 2022, and Changpeng Zhao’s net worth had reached a peak of $96 billion in January of that year.
This decline in Binance’s fortunes is not an isolated incident, as regulatory uncertainties and rising interest rates have made other investment options more appealing. For instance, Coinbase Global, a major cryptocurrency exchange, saw a 52 percent drop in spot trading volume in the third quarter compared to the previous year, as reported by CCData.
Changpeng Zhao’s experience is just one example of the volatility and challenges faced by cryptocurrency founders and exchanges in the rapidly evolving digital financial landscape.
