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The CEO and co-founder of Binance Changpeng Zhao has taken personal hits from the market with his net worth falling due to low trading volumes.
The Bloomberg Billionaire Index Index released on Oct 26, shows the net worth of Zhao cut by $11.9 billion, a massive decline from his $96.9 billion portfolio at the start of last year.
Formerly ranked 11th on the world’s most wealthy list, the crypto boss now sits in 95th place with a $17.3 billion net worth.
On the other end, Sam Bankman-Fried the former CEO of collapsed crypto exchange FTX which was at the time in competition with Binance has his once-hailed $16 billion net worth wiped to zero.
Bankman-Fried currently stands criminal and civil trial for his role in the implosion of FTX in November 2022 which led to billions of dollars wiped out from the market.
Zhao and Binance face a tough path
Zhao’s drop in net worth can be linked to Binance’s 38% drop in trading volumes due to renewed regulatory scrutiny of digital asset exchanges from the United States and global authorities.
💰💸 Binance Sees Big Drop in Bitcoin Trading Volume Amid SEC Scrutiny
A new report revealed that the platform’s 7-day average spot trading volume for Bitcoin has plummeted by 57% since the beginning of September.#CryptoNews #Bitcoinhttps://t.co/4FrRDstGxt
— Cryptonews.com (@cryptonews) September 20, 2023
Bloomberg calculated Zhao’s net worth relying on Binance spot and derivative trading volumes alongside fees posted on the website, using data from CoinGecko and Coinpaprika to October 2023.
Binance, which boasts 150 million users and the largest exchange by trading volume, has seen its share decline for seven consecutive months even after the fall of its competitor FTX.
According to several observers, the decline in trading volumes is largely due to the prolonged crypto winter that has affected all aspects of the market leading to multiple bankruptcies and miner shortages.
📉 The market cap of $BUSD has plummeted from an all-time high of $23.5B, recorded on November 15, 2022. The current market cap stands at close to $2.1B, significantly lower than stablecoins like $USDT and $USDC.#CryptoNewshttps://t.co/8QnyoNKoen
— Cryptonews.com (@cryptonews) October 26, 2023
In January 2022, Binance trading volumes were over 55% coming off the heels of the previous year’s bull run which saw the price of Bitcoin (BTC) soar over $64,000
Binance and regulation
In recent times, the exchange has been slapped with lawsuits from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for allegedly offering trading services to unregistered securities, improper registrations, commingling of user assets and marketing unregistered derivatives to the US markets.
Despite the exchange’s rejection of claims, users remain skeptical of the regulatory approach heightened by top executive exits from the company and its withdrawal from the Russian market.
Binance.US, the United States entity of the exchange I has taken hits in recent months with trading volumes falling compared to last year’s figures. Zhao js reported to have an 86% stake in the firm.
Following the lawsuits, the company withdrew support for dollar transactions, which took a $1 billion chunk from Zhao’s fortunes.
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