Despite facing a potential prison sentence next year after pleading guilty to criminal charges in the U.S., 2023 has been a year of financial growth for former Binance Holdings Ltd. CEO Changpeng Zhao.
His estimated wealth has seen an impressive increase of nearly $25 billion. This financial upturn coincided with a significant recovery in Bitcoin’s value, which soared more than 160% following a market downturn in 2022.
According to the Bloomberg Billionaires Index, Zhao leads the pack among crypto entrepreneurs who witnessed a substantial rise in their estimated net worth in 2023. Other notable figures in the crypto world, including Coinbase Global Inc. CEO Brian Armstrong and the Winklevoss twins, Cameron and Tyler, also experienced a considerable resurgence in their fortunes.
Campbell Harvey, a finance professor at Duke University who studies digital-asset markets said :
“Investment in crypto is not for the faint of heart; you need to be prepared for the spectacular ups and downs. There is a reason that these investors are billionaires, and it is not luck. They are not tempted to dump their holdings in down markets. They believe in the long-term opportunities this space offers.”
CZ has experienced a remarkable increase in wealth, surpassing five times the $4.3 billion in fines Binance agreed to pay to US authorities. His current fortune, estimated at over $37 billion, primarily stems from his majority ownership in Binance, the world’s largest crypto exchange, which he established.
Despite a slight dip in market share this year, Binance has reaped the benefits of increased trading volumes following the resurgence in the crypto markets. Zhao, who did not provide a comment for this story, also holds Bitcoin and BNB, the native token of Binance, although Billionaires Index didn’t include these assets in its valuation.
In November, Zhao and Binance admitted guilt to charges of anti-money laundering and violating US sanctions in a comprehensive agreement with the US government. This settlement allows Binance to continue its operations. Under the terms, Zhao agreed to pay a personal fine of $50 million and to resign as CEO, while retaining his ownership stake in the exchange.
Zhao, who could face up to 10 years in prison, is likely to receive no more than 18 months due to a plea agreement that seems to have spared him from the severe consequences faced by other notable figures in crypto-related crimes. The exact sentence length the Justice Department will propose remains undisclosed. In a recent ruling, a federal judge in Seattle decided that Zhao must stay in the United States and cannot return to his residence in the United Arab Emirates. His sentencing is set for February 23.
Despite the increase in his fortune, Zhao’s wealth still falls short of its early 2022 peak of nearly $97 billion, and it has also declined from its mid-year high of $50.4 billion, according to the Bloomberg Billionaires Index.
Zhao is not the only one who has profited from the 2023 crypto market rebound. This surge was partly due to the resolution of the Binance case, lifting significant uncertainty from the market, and also by the growing hope that the US will eventually authorize exchange-traded funds that invest directly in Bitcoin.