Binance's luna holdings drop from $1.6 billion to $2,200. Here's what's next for Zhao
In January of 2022, we reported how Changpeng Zhao, known as “CZ” in the crypto world, the CEO of cryptocurrency exchange platform Binance, had the largest cryptocurrency fortune in the world, with an impressive net worth of 96 billion dollars.
His net worth at the time was larger than that of Asia’s richest man Mukesh Ambani, who had the 11th spot in the Bloomberg Billionaires Index with a whopping 93.3 billion dollars to his name. Bloomberg’s estimation of Zhao's fortunes was founded on Binance's 20 billion dollar increase in 2021 revenues and the entrepreneur's 90 percent of the exchange’s shares.
Now it seems the tide has turned, and Zhao has lost a significant amount of his fortune. The former billionaire joked on Twitter that he was "poor again" because his exchange's investments in the luna cryptocurrency went from a shocking $1.6 billion just a month ago to a mere $2,200 this week.
Poor again.https://t.co/88v2U2vjfM— CZ ? Binance (@cz_binance) May 17, 2022
Zhao further explained that Binance had in its roster 15 million luna tokens that it received in exchange for its $3 million investment made in 2018 into the Terra network that luna is based on. As of Monday, these precious, now devalued tokens were "never moved or sold," added Zhao.
2/ Binance received 15,000,000 LUNA (at peak worth $1.6 billion USD, now not much) as part of the original ($3m) invest. 560x return at peak. It still sits on the address we received at ?. Never moved or sold.— CZ ? Binance (@cz_binance) May 16, 2022
What happened to luna?
Luna's valuation was very closely tied to its sister token TerraUSD. When the latter lost its peg to the US dollar two weeks ago, investors rushed to get rid of their holdings of that token, essentially dragging luna's price down with them.
What can be done now?
There is the possibility that the Terra team could reimburse its retail investors. In fact, on Monday, Zhao tweeted urging the firm to do so: "To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retail users first, Binance last, if ever," Zhao wrote.
Is Zhao now poor?
Despite his funny claims, Zhao is by no means poor. Zhao’s personal crypto holdings were estimated to be between 28 to 39 billion dollars last January and Binance is by far the largest cryptocurrency exchange in the world, facilitating as much trading as the next four largest exchanges combined. Furthermore, Zhao has his personal investments in Bitcoin and Binance's own coin, Binance Coin (BNB), making his net worth quite secure. As of Thursday, Bloomberg estimates that his net worth lies steadily at about $14.8 billion.
The news does, however, illustrate how volatile cryptocurrencies can be and why investing in them should be done with caution. If tech giants like Zhao can lose so much money, imagine how much regular folk can be subjected to.
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