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The net worth of Binance CEO Changpeng Zhao fell more than $2 billion on Wednesday following revelations the CFTC is pursuing legal action against his exchange.
Zhao dropped seven placements from #46 at $27.9 billion to #51 at $25.8 billion, according to the Bloomberg Billionaire Index.
Even at current paper valuations, Zhao’s worth can purchase up to 13.2 million troy ounces of gold, and 330 million barrels of crude oil. That’s equivalent to 0.11% of the US’s total GDP, index data show.
Born in China, Zhao was later raised in Canada by his mother, a teacher, and his father, who received a job at the University of British Columbia as an academic.
To date, Zhao has seen more than 65% of his paper net total worth erased from a year ago, from $73.9 billion to current levels, Bloomberg data shows. The losses come after several industry-wide company failures in 2022 negatively impacted digital assets valuations and harmed investor interest.
The CEO’s fortune stems from his controlling interest in Binance, which is said to serve more than 120 million users worldwide and plays host to hundreds of cryptoassets. Zhao also owns Binance.US, which was previously valued at $4.7 billion in a funding round in March of last year.
“Unexpected and disappointing civil complaint”
The CFTC sued the exchange, Zhao and Binance’s former chief compliance officer, Samuel Lim, on Monday over allegations of trading and derivatives violations.
Zhao responded Monday, tweeting the number “4” in reference to a separate tweet in January, meant to spur observers into ignoring “fake news” as well as fear, uncertainty and doubt.
In a blog post on the same day, Zhao said the CFTC’s suit contains an “incomplete recitation of facts” before attempting to address several issues in the complaint.
The CEO pointed to Binance’s multiple industry licenses, its “transparency” with law enforcement and its KYC measures, intended to block US users by nationality — a subject the CFTC takes particular issue with.
Industry observers have painted a dim picture for the exchange, which they say would have a hard time defending those allegations in what is perceived as a “fatal blow” to its operations.
It follows similar actions taken against crypto firms by regulators this month, including the SEC serving Coinbase a Wells notice as it intends to probe the exchange over allegations of securities violations.
But Dmitry Lapidus, of crypto-native investment fund Dragonfly, told Blockworks the drop in Zhao’s worth meant little more than an “ego hit.”
“When you’re the king, everyone comes at you right?” Lapidus said.
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