The index Bloomberg of Billionaires provided an important piece of information by reducing by 38% your estimate of the company’s income Binance crypto exchange. This drastic revision comes after data exposed that the company’s trading volumes fell considerably throughout this year.
As a result, the fortune of the founder of Binance, Changpeng Zhaoknown as CZ, suffered a decrease of US$11.9 billion, reducing it to a total of US$17.2 billion.
CZ, 46, was also involved in the recent events that led to the summons of Sam Bankman-Fried (founder of FTX) before the federal courts. In November, the founder of Binance himself announced the liquidation of a token linked to FTX, in response to a report that Bankman-Fried’s hedge fund, Alameda Research, held a significant position in it.
The news triggered a wave of withdrawals by FTX clientsand the stock exchange could not cope with the avalanche of applications, declaring bankruptcy in less than a week.
This episode resulted in Bankman-Fried’s fortune being reduced to zero, after having reached a peak of US$26 billion in March of last year. The Bloomberg Index calculates Binance’s revenue based on spot and derivatives trading data obtained from cryptocurrency tracking services such as Coingecko and Coinpaprika.
At the beginning of this year, Binance represented 62% of total cryptocurrency operations on the stock market in the first quarter, thanks to a zero commission promotion for trading pairs. However, once this offering was concluded, Binance’s market share fell to 51% by the end of the third quarter, according to research company CCData, cited by Bloomberg. To date, Binance representatives have not commented on the matter.
In recent months, lThe crypto exchange has become increasingly isolated from the traditional financial system. The Securities and Exchange Commission sued Binance in June, and the Commodity Futures Trading Commission began watching it closely earlier this year for circumventing rules that allow US users to access Binance.
Cryptocurrencies and the regulatory impact
Regulators allege that the company lacks adequate anti-money laundering controlsinflates trading volumes and improperly manages customer assets, accusations that Binance is fighting in court.
In June, the Bloomberg Wealth Index completely wiped out the value of the US exchange Binance after announce that it would stop carrying out transactions in dollarsresulting in a drastic reduction in trading volumes.
Binance.US had been valued at $4.7 billion in a funding round in March 2022, while CZ’s net worth peaked at $96 billion in January of that year.
The impact is not limited to Binance alone, as regulatory uncertainty and rising interest rates make other forms of investment more attractive. Spot trading volume at Coinbase Global Inc. also plunged nearly 52% in the third quarter compared to a year earlier, according to data from CCData
Source: Ambito
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