The crypto exchange saw its estimated revenues cut by 38%, leading to a drop in CZ’s fortune from $29.1 billion to $17.2 billion. The fall in revenue was calculated using data from Coingecko and Coinpaprika.
The liquidation of an FTX-linked token, in which hedge fund Alameda Research had a substantial stake, sparked panic withdrawals. This led to the bankruptcy of FTX, wiping out the fortune of Sam Bankman-Fried, Alameda’s founder, which had peaked at $26 billion.
Following the end of a zero-fee promotion, Binance’s market share dropped from 62% in Q1 to 51% in Q3, according to CCData. The decision to halt dollar transactions led to a volume drop and reduced Binance’s US exchange value to zero, further impacting CZ’s net worth.
Furthermore, Binance is grappling with regulatory lawsuits from the SEC and Commodity Futures Trading Commission. These lawsuits allege inadequate money-laundering controls, inflated trading volumes, and mishandling of client assets. Regulatory uncertainty and rising interest rates have also affected other exchanges like Coinbase (NASDAQ:COIN) Global Inc., resulting in a 52% drop in spot trading volume in Q3.
Despite these challenges and increasing isolation from traditional finance sectors, Binance continues to dispute the allegations and is fighting them in court. Meanwhile, Bankman-Fried is currently on trial in New York for fraud following his involvement in the financial debacle at Binance. The company did not respond to requests for comment regarding these issues.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Source: Cryptocurrency - investing.com
