Changpeng Zhao, widely known as CZ and the founder of Binance, one of the largest cryptocurrency exchanges, has suffered a significant blow to his fortune. According to a recent Bloomberg report, CZ’s wealth plummeted by $12 billion due to the ongoing slump in crypto-trading activities.
Per the report, this decline was primarily attributed to a sharp drop in trading volumes at Binance throughout the year.
CZ’s Financial Losses
The Bloomberg Billionaires Index revised its revenue estimates for Binance, slashing it by 38% after data revealed a decline in trading volumes at the exchange. As a result, CZ’s net worth now stands at $17.2 billion, marking a significant reduction from his previous valuation.
According to Bloomberg, CZ’s involvement in recent events that led to the bankruptcy filing of FTX further impacted his financial situation. In November, CZ announced the liquidation of a token linked to FTX (FTT) after reports emerged that Alameda Research, the hedge fund owned by Sam Bankman-Fried, the founder of FTX, held a large position in it.
The announcement triggered a rush among FTX customers to withdraw funds, overwhelming the exchange’s infrastructure. As a consequence, FTX declared bankruptcy within a week, erasing Bankman-Fried’s fortune, which had peaked at $26 billion in March the previous year.
To estimate Binance’s revenue, the Bloomberg Billionaires Index relies on spot and derivatives trading data from crypto-tracking services Coingecko and Coinpaprika.
Binance had witnessed a significant gain in market share earlier this year, reaching 62% of total on-exchange crypto trades during the first quarter. However, after a promotional zero-fee period for popular trading pairs ended, Binance’s market share slid to 51% by the end of the third quarter, as reported by research firm CCData.
Binance Value Plunges As Lawsuits And Allegations Take A Toll
Binance has also faced increasing regulatory scrutiny, isolating itself from the traditional financial system. The Securities and Exchange Commission (SEC) filed a lawsuit against Binance in June, accusing the exchange of violating regulations.
Earlier this year, the Commodity Futures Trading Commission (CFTC) also took legal action against Binance for non-compliance with rules that allowed US users to access the platform.
Allegations against Binance include inadequate money-laundering controls, inflated trading volumes, and mishandling of client…
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