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Binance’s CZs Net worth Skyrockets Despite Stepping Down and Police Interest: Where is This Money Coming From?

Last Updated March 25, 2024 12:57 PM
Teuta Franjkovic
Last Updated March 25, 2024 12:57 PM

Key Takeaways

  • CZ’s net worth surged due to a rise in Binance’s share price, adding nearly multiple billions to his fortune.
  • The key driver behind Zhao’s wealth increase is Binance’s impressive revenue over the past year.
  • Despite losing $1 bn from the collapse of Binance.US and facing regulatory challenges, CZ’s wealth remains substantial.

Changpeng Zhao, the billionaire founder of Binance, has seen his net worth increase  by up to $8.42 billion, elevating his total wealth to almost $50 billion, with a year-to-date gain of $13.9 billion.

Zhao’s fortune surged from $39.9 billion to $48.3 billion as Binance’s share price climbed from $549.19 on March 22, 2024, to $554.30 by the morning of March 25, 2024, per the Bloomberg Billionaire Index .

Where Is Zhao’s Wealth Coming From?

Zhao’s wealth largely comes from his significant ownership in Binance, the top cryptocurrency exchange globally by volume, with more than 150 million users as of August 2023.

Binance’s revenue, amounting to $9.8 billion, is calculated from the average of its spot and derivative trading volumes over the last 12 months up to March 2024, tracked by Coingecko.com  and CCData . The revenue figure also includes average transaction fees for spot and derivatives trading, as listed on Binance’s website.

The revised revenue figure in March 2024 led to an estimated $11 billion increase  in Zhao’s net worth, showcasing the substantial growth of Binance and its founder’s wealth within the dynamic cryptocurrency market landscape.

Losing $1 Bn as Binance.US Folds, Still Remaining a Top Billionaire

Changpeng Zhao, a key figure in the cryptocurrency sector, is known for his 90% stake in Binance , as revealed through public statements and filings in regions where ownership details are available.

Zhao also has a significant share in Binance.US, holding an estimated 86% following a valuation of $4.7 billion during a March 2022 fundraising event. However, Binance.US faced challenges, notably after a lawsuit from the SEC in June 2023 led to a shift to a crypto-only model and the cessation of dollar transactions. This move caused the exchange’s value to drop to zero, stripping approximately $1 billion from Zhao’s wealth.

Despite these setbacks, Zhao’s investments extend beyond Binance, including stakes in Bitcoin and Binance Coin, though the exact amount of these holdings is not disclosed and thus not factored into his net worth. As of March 2024, the Bloomberg Billionaires Index listed Zhao as the 26th wealthiest person worldwide  (he was 35th in December 2023).

Binance’s Early 2023 Dominance Crumbles as Regulations Bite

In early 2023, Binance solidified its position in the cryptocurrency market, securing a 62% share of total on-exchange crypto trades  in the first quarter, largely thanks to a zero-fee promotion for key trading pairs that attracted more users to the platform.

However, after this promotional period ended, Binance saw its market share drop to 51% by the third quarter’s close, as per CCData’s findings . This decline highlighted the difficulties Binance faced in maintaining its lead under changing market dynamics and increased regulatory oversight.

The company encountered significant regulatory and legal challenges, especially from traditional financial systems. In June, the SEC launched a lawsuit against Binance, accusing it of multiple regulatory violations. Earlier in the year, the CFTC also began proceedings against the company for issues including the provision of access to U.S. users, lack of adequate anti-money laundering measures, reported overstatements of trading volumes, and improper handling of customer funds.

These regulatory issues led to serious consequences for Binance, culminating in a hefty $4.3 billion penalty from U.S. regulators.

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