Changpeng Zhao's Net Worth Doubles to $61 Billion Despite Legal Woes

Infotrading.io - Changpeng Zhao, widely known in the crypto community as CZ, has seen his net worth soar to $61 billion, making him the 24th richest person in the world, despite serving a sentence in Santa Barbara’s Lompoc minimum security prison. As the founder of Binance, the world's largest cryptocurrency exchange, Zhao's wealth has ballooned, driven by his substantial holdings in Binance's native token, BNB.

The Rise of Changpeng Zhao's Wealth

According to Forbes, Zhao's net worth has doubled, placing him just after Julia Koch and family in the global wealth rankings. The next richest person in crypto, Coinbase founder Brian Armstrong, has a net worth of $11 billion, significantly less than Zhao's fortune.

Zhao's financial ascent has two primary components: his 90% equity stake in Binance, valued at $33 billion, and his personal holdings in BNB tokens. Despite stepping down as CEO in November 2023 as part of a settlement with the U.S. Department of Justice, Zhao's wealth continued to grow. Binance paid a $4.3 billion fine to the government, while Zhao personally paid a $50 million fine. Since his plea, Binance has increased its dominance in the global crypto exchange market, capturing 42% of the total spot market.

The Value of BNB Tokens

A significant boost to Zhao's net worth comes from his extensive holdings in BNB tokens. Forbes estimates Zhao holds 94 million BNB tokens, about 64% of the total 147.5 million BNB tokens in circulation. Binance itself owns 71% of the BNB supply.

BNB has experienced a remarkable surge in 2024, with its price rising 100% and recently hitting an all-time high of $714. This increase far outpaces other top cryptocurrencies like Bitcoin (up 54%), Ether (up 53%), and Solana (up 49%). The current market capitalization of BNB stands at $110 billion.

The History and Function of BNB

Binance Coin (BNB) was launched in 2017 as a fundraising tool for Binance. BNB tokens function similarly to airline mileage loyalty points rather than actual equity shares. They offer no ownership but provide holders with benefits such as trading discounts and incentives to recruit new users. Despite these functionalities, BNB trades on crypto exchanges like stocks, attracting significant investor interest.

Zhao amassed his BNB stockpile through two primary methods. Initially, he and the founding team received 80 million tokens from the total supply of 200 million BNB. A forensic analysis by Forbes and Gray Wolf Analytics indicates that Binance holds 46.2 million of these tokens, with Zhao credited for 41.6 million due to his 90% ownership of Binance. Additionally, Binance's ICO was initially undersubscribed, leading Zhao to funnel unsold tokens into wallets he controlled. Today, these holdings significantly contribute to his net worth.

The Impact of Legal Issues

Despite facing legal challenges, including a guilty plea to anti-money laundering and sanctions violations, Zhao's financial empire remains robust. The Securities and Exchange Commission is currently suing Binance for selling BNB to U.S. customers as an unregistered security, highlighting ongoing regulatory scrutiny.

Nevertheless, BNB's performance and Zhao's strategic management have maintained Binance's market position.

Market Influence and Future Outlook

Changpeng Zhao's story exemplifies the volatile yet lucrative nature of the cryptocurrency market. His ability to navigate legal challenges while maintaining and growing his wealth showcases his resilience and strategic acumen. As Binance continues to dominate the crypto exchange market, Zhao's influence within the industry remains significant.

The future of Binance and BNB will depend on regulatory developments and market dynamics. However, Zhao's substantial holdings and the ongoing growth of BNB suggest that his financial ascent may continue, even from behind bars.