Chanpeng Zhao, the founder and CEO of Binance, has lost $12 billion in recent months due to a substantial decrease in trading volumes at the global crypto exchange as well as the massive devaluation of Binance US.
The Bloomberg Billionaires Index now estimates CZ’s net worth to be $17.2 billion, dropped down a lot from the peak of $96 billion in January 2022. This year alone, CZ has seen a loss of 40.7%.
The Binance cryptocurrency exchange’s revenue is calculated using data from the average of transaction fees disclosed on Binance’s website as well as from CCData, Coingecko, and Coinpaprika, which track both spot and derivatives trading separately.
Earlier this year, Binance captured a significant portion of the on-exchange crypto trading market, reaching a peak of 62% in the first quarter, and this was partly due to a promotion offering zero fees for popular trading pairs.
However, after this promotion ended, Binance’s market share decreased to 51% by the end of the third quarter, according to research from CCData.
Binance has seen its trading volume decline sharply in recent months. In the third quarter of 2023, spot trading volume is 38% down from the previous year.
Binance US had been valued at $4.7 billion in the March 2022 funding round. CZ owns an 86% stake in the firm based on the data from previous fundraisers. It was also hit hard by the crypto trading slump.
In June 2023, Binance US announced it would no longer be supporting dollar transactions, and its value was reduced to zero. CZ lost a fortune of $1 billion due to these events however, this was not his only trouble of the year.
CZ was involved in the events that led to Sam Bankman-Fried’s legal case. In November, CZ announced that he was selling off the digital token FTT associated with the FTX exchange.
Some FTX customers rushed to withdraw their funds, causing the exchange to struggle to keep up with the increased demand. Less than a week later, FTX had to declare bankruptcy.
This chain of events caused Sam Bankman-Fried’s personal wealth to plummet to zero, despite it peaking at $26 billion in March of the previous year. And the overall crypto market got into a year-long slump.
CZ’s personal investments in Bitcoin and Binance coin are also assumed to take a dive down the road, though these investments are not public knowledge, hence their amount is unknown.