Chenpeng Zhao, one of the top 20 wealthiest people in the world, has tweeted that he has become poor again in his twitter page after his company’s holdings drastically dropped from $1.6 billion to $2,200.
With an annual revenue of around $20 billion, Binance is a titan in the finance industry.
Both the company and CZ’s personal fortunes have taken a massive hit this year, however, as a combination of inflation, the war in Ukraine, a looming recession, and a decimation of the global stock and crypto markets have combined to take an unprecedented chunk out of the digital economy.
In a tweet on Monday, Zhao announced that Binance had been holding on to 15 million Luna tokens, received in exchange for a $3 million investment into the Terra network in 2018 that Luna is based on. Its Luna tokens were “never moved or sold” as of Monday, according to Zhao.
However, Zhao revealed this week that none of these tokens had been moved or sold since their acquisition by Binance, and that their value had shrunk from an estimated $1.6 billion when the token hit its peak price to a paltry $2,200 this week. Today, the coin is trading at around $0.0001468 per token.
This implosion started when Luna’s sister token, TerraUSD, lost its peg to the US dollar two weeks ago. The two tokens’ valuations are tied to each other, which meant that when TerraUSD’s price fell, investors rushed to dump their holdings of that token as it plummeted in value, which in turn, dragged down Luna’s price.
The two tokens’ free fall was estimated to have wiped out more than $50 billion in paper value, taking out a huge chunk of Binace’s turnover and wiping out more than $80 billion from CZ’s personal fortune, slicing his net worth from around $97bn on New Year’s Day to ‘just’ $16bn in the blink of an eye.
Source – Unilad & Twitter