Crypto founder Sam Bankman-Fried (SBF) is facing fraud charges but he isn’t the only one in the crypto industry under scrutiny. Recent data led the Bloomberg Billionaires Index to reduce its revenue estimate for the crypto exchange Binance by 38%, which took away $11.9 billion from the wealth of Binance‘s founder, Changpeng Zhao (CZ), also known as CZ, leaving him with $17.2 billion.
CZ was involved in activities that contributed to the legal challenges faced by SBF. In a notable move last November, CZ declared he was liquidating a token connected to FTX, following revelations that SBF‘s hedge fund, Alameda Research, had a significant stake in it. This led to a rush of FTX clients withdrawing funds, eventually resulting in the exchange declaring bankruptcy. Consequently, Bankman-Fried’s net worth plummeted from a high of $26 billion to nothing.
Binance‘s revenue calculations, based on data from Coingecko and Coinpaprika, showed a significant decline in its market share from the first quarter to the third, primarily attributed to the conclusion of a zero-fee promotion. The crypto exchange has recently been distancing itself from the conventional financial world. Both the Securities and Exchange Commission and the Commodity Futures Trading Commission have taken legal actions against the exchange for various alleged violations, including inadequate money-laundering safeguards.
Binance has denied these claims and is contesting them.Furthermore, after announcing its decision to halt dollar transactions, Bloomberg’s wealth index devalued Binance’s US exchange to nothing, a steep drop from its $4.7 billion valuation in March 2022. At the start of that year, CZ‘s net worth had reached a record $96 billion.This downturn isn’t exclusive to Binance. External factors such as regulatory ambiguities and increased interest rates are influencing the crypto market, as evident from Coinbase‘s 52% trading volume drop in the third quarter compared to the previous year.The crypto landscape is shifting rapidly, and industry leaders are feeling the effects.