The traditional financial system is fighting a bitter battle to defend its right to exist and try to prevent centralized models from being replaced by distributed fiat ones. Unfortunately, Changpeng Zhao and the Binance exchange he formerly headed fell into this meat grinder of regulatory pressure.
The assessment of the fortune of Changpeng Zhao, the founder of the largest cryptocurrency exchange Binance, raises many questions and disputes. CZ himself does not disclose the exact figure of his capital, hinting that the amount is small to talk about. However, various publications and experts give diametrically opposed assessments.
In November 2021, according to Wu Blockchai, Zhao's net worth exceeded $85 billion. This automatically made him one of the richest Chinese in the world and one of the richest people on the planet.
However, Colin Wu believes that the income of the founder of the exchange may exceed these figures. A Chinese journalist suggested that CZ's capital "could be about $100 billion."
Bloomberg journalists were much more modest in their calculations. They did not attribute too much to Changpeng Zhao and in April 2023 estimated the Chinese’s fortune at only $28.2 billion, including him in the top three of the “financial whales” rating.
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Zhao himself denied all the calculations, saying that he doesn’t even think about such “crazy amounts.” Notably, CZ called himself a “small potato” compared to other billionaires like Elon Musk.
Such a serious discrepancy in the capital estimates of the former head of Binance indicates the opacity of financial flows in the cryptocurrency industry and the difficulty of calculating the real wealth of its main players.
Lado Okhotnikov: “Among the bad guys, Changpeng Zhao held his own best. He didn't scam FTX clients like Sam Bankman Fried. And he did not mislead investors about the stability of the cryptocurrency, like Terraform and Kwon with UST. But he was still accused of money laundering, although there is no evidence that anyone suffered from it.”
Lado Okhotnikov is an extraordinary personality, the founder of the Meta Force metaverse, a man who fights for decentralization and calls for freedom in the online world. He advocates the principles of libertarianism, striving for everyone to have freedom of choice and self-government in the virtual space. His vision of the metaverse is one where there are no central control authorities.
In one poker game, fate brought Changpeng Zhao together with venture investor Bobby Lee. He told him about cryptocurrency and offered to invest 1/10 of it in Bitcoin. Li’s words sank deep into Zhao’s mind: “What appealed to me were the limitless possibilities of the new financial instrument.”
Inspired by the idea of digital assets, CZ headed the department at Blockchain.com in December 2013. And the next year he became the technical director of the largest Chinese crypto exchange OKCoin.
Lado Okhotnikov: “As far as I know, Zhao, having believed in the future of Bitcoin, sold real estate in Shanghai in 2014 and invested all the proceeds in the first cryptocurrency. This bold move marked the beginning of his journey to create the Binance cryptocurrency empire and gave him the status of one of the richest people in the world.”
It took literally a couple of years for a young, ambitious Chinese to launch a cryptocurrency exchange. He managed to raise $15 million through the ICO of his own BNB token.
In just 8 months, Binance became the largest exchange in the world by trading volume and earned $200 million.
In 2021, at the peak of Bitcoin's rise to $69,000, transaction volume on Binance exceeded $34 trillion. “Back then this figure seemed somewhat unreal,” shares Lado Okhotnikov.
Binance was originally located in China. However, when the Central Bank of the People's Republic of China officially announced a ban on any transactions with digital currencies in the country, I had to move to Japan, and later to Malta.
At the 2022 Consensus conference, Zhao made a statement that the current downturn in the digital asset market presents a great opportunity to expand the business. According to him, “crypto winter” allows not only to attract highly qualified personnel, but also to make profitable acquisitions of other companies in the industry.
Lado Okhotnikov: “Indeed, thanks to timely and thoughtful actions, in 2022, when there was a decline in the digital asset market, Meta Force was already well prepared. The team was assembled, we had a well-developed decision on how to expand the business.”
“...We were able to take advantage of the market situation to attract qualified personnel and make profitable deals to expand the metaverse,” continued Mr. Okhotnikov.
Adopting the right strategy in advance allowed Meta Force not only to survive the “crypto winter”, but also to effectively use this time to strengthen its position in order to further develop into one of the leaders in the virtual reality industry.
Lado Okhotnikov: “Now we are ready to maximize the accumulated potential as the market recovers. Along with the implementation of key software products, one of our current projects is the development of a decentralized exchange DEX, which, according to our estimates, will be especially in demand by market participants in the near future.”
Orca overtakes PancakeSwap in DEX activity, Uniswap leads in trading volume.
According to other data, the Solana blockchain continues to outpace Ethereum and other major networks in terms of activity on decentralized exchanges (DEX) over the past few days.
At the same time, decentralized exchange PancakeSwap, powered by Binance Smart Chain, has become the leader in the number of active users over the past month, surpassing competitors.
These figures indicate the growing popularity of alternative blockchains and DEX platforms, which are increasingly competing with dominant players like Ethereum and centralized exchanges.
Analysts attribute this trend to the lower fees and high throughput of alternative solutions. What's ahead is expected to further strengthen distributed liquidity across different blockchains and DEXs.
At the same time, we should not forget the series of scandals with centralized crypto exchanges. Because of this, decentralized platforms (DEX) are attracting increasing attention from regulators.
If in the case of centralized platforms there is leverage through their operators, then DEX, inherently, lacks a single control center.
The question remains open: how to control decentralized exchanges that are not subject to direct regulation? With DEXs rapidly growing in popularity, regulators are facing a new and serious challenge.
Speaking on the “Squawk Box” program Gary Gensler, a head of the SEC, again expressed his critical attitude towards cryptocurrencies. In his opinion, it is still “an extremely risky asset, subject to manipulation and unpredictable price fluctuations.”
However, in addition to his traditional negative rhetoric towards the crypto market, this time Gary Gensler also raised a number of other important regulatory issues. In particular, he pointed to an error in Lyft's financial statements. In addition, he commented on the unprecedented compensation package provided by Elon Musk at Tesla and other relevant topics under SEC supervision.
Despite ever-increasing regulatory pressure from the SEC, criticism from powerful figures, and general uncertainty surrounding cryptocurrencies, the industry will bet on further decentralization in the coming years. And, despite the growing appetite of regulators for tightening control, the crypto market intends to fully implement the program of transition to completely independent solutions.
Refusal from single control centers and distribution among equal participants will reduce regulatory risks and ensure greater stability of the crypto industry in the face of growing pressure. The desire for maximum decentralization will become a key trend in the coming period.
Based on Dan Michael materials
The head of Meta Force Press Center
press@meta-force.space
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