Binance Billionaire Changpeng Zhao's Net Worth Has Soared Since He Became A Felon

Forbes

Prison has been good to Binance founder Changpeng Zhao. Already the richest person to go behind bars and the wealthiest person in crypto many times over, Zhao’s net worth has soared since he became a felon.  Read the full story on Forbes: https://www.forbes.com/sites/javierpaz/2024/06/14/how-cryptos-richest-billionaire-doubled-his-net-worth-behind-bars/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, How Crypto's Richest Billionaire Doubled His Net Worth Behind Bars

00:08Prison has been good to Binance founder Changpeng Zhao, who is also known as CZ.

00:14Already the richest person to go behind bars and the wealthiest person in crypto many times

00:18over, Zhao's net worth has soared since he became a felon.

00:24Forbes now estimates that he is worth $61 billion, making him the 24th richest person

00:29in the world, just after Julia Koch and Family.

00:33The next richest person in crypto is Coinbase founder Brian Armstrong, at $11 billion.

00:39CZ's upward revision has two components.

00:43First, his 90% equity stake in Binance, the large crypto exchange, is valued at $33 billion

00:50despite CZ stepping down as CEO in November 2023.

00:54He stepped down as part of a settlement with the U.S. Department of Justice, in which he

00:58pled guilty to anti-money laundering and sanctions violations.

01:02His company also paid a $4.3 billion fine to the government.

01:06However, the impact on Zhao's personal wealth was less severe, since he only had to pay

01:12a $50 million fine.

01:15In the six months since his plea, Binance actually increased its dominance among crypto

01:19exchanges worldwide in terms of trading volume, though it was excluded from Forbes' list

01:24of the most trustworthy crypto exchanges.

01:27According to data compiled from The Block, which is a digital assets information company,

01:32Binance's share of the total spot market across exchanges has increased to 42% in the

01:38six months since he left the company, from an average of 38% in the two months before

01:43his settlement.

01:45The big change to CZ's net worth comes from Forbes' discovery of his personal holdings

01:49in his exchange-issued token BNB, which we estimate to be 94 million tokens, or 64% of

01:57the total 147.5 million BNB tokens in circulation.

02:02Forbes estimates that Binance owns 71% of the BNB supply.

02:08Despite the exchange's legal woes, BNB has been on a tear in 2024, surging 100%, far

02:15outpacing other top cryptos such as Bitcoin, which is up 54%, Ether, up 53%, and Solana,

02:23up 49%.

02:25BNB recently hit an all-time high of $714, giving it a market capitalization of $110

02:32billion.

02:33So you might ask, what is BNB?

02:37BNB, or Binance Coin, initially launched in 2017 as a fundraising tool for CZ to launch

02:44his new exchange.

02:46Tokens like BNB are created by the developers running the crypto projects, and more similar

02:51to airline mileage loyalty points than actual equity shares in a company, though they trade

02:56on crypto exchanges like stocks and are sought after by investors.

03:00Tokens like BNB offer no ownership but reward holders, who are often customers, with discounts

03:06for trading or as an incentive to recruit new account holders.

03:10They are often used, in the words of one former FTX insider, whose company's exchange token

03:15FTT led to its dramatic downfall as a, quote,

03:19form of stock because there is no public equity.

03:23The Securities and Exchange Commission seems to agree, as it is currently suing Binance

03:28for selling BNB to U.S. customers as an unregistered security.

03:32Zhao, who is 47 years old, amassed his BNB stockpile in two ways.

03:39Binance was created in 2017, and he and the founding team received 80 million tokens from

03:44a total supply of 200 million BNB.

03:47Forbes' forensic analysis of the wallets that receive these tokens, conducted in conjunction

03:52with Graywolf Analytics, indicates that the company holds 46.2 million of the original

03:5780 million tokens.

04:00CZ is credited with 41.6 million BNB from this amount due to his 90% ownership of Binance.

04:07The second component of CZ's wealth is more obscure.

04:10The results from an investigation published by Forbes and conducted with Graywolf in October

04:152023 revealed that Binance's ICO, or Initial Coin Offering, was initially undersubscribed,

04:23which led to CZ and his company funneling unsold shares into wallets he controlled.

04:27In 2017, Binance claimed that it sold 100 million BNB for 15 cents each, raising a total

04:35of $15 million.

04:37More analysis last fall showed that no more than 10.8 million BNB was sold, netting less

04:43than $5 million.

04:46For full coverage, check out Javier Paz and Stephen Ehrlich's piece on Forbes.com.

04:52This is Kieran Meadows from Forbes.

04:54Thanks for tuning in.

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