Binance founder Changpeng Zhao, who was already the richest person to go to prison and the wealthiest person in crypto many times over, has seen his net worth skyrocket after becoming a felon.
Forbes estimates his net worth at $61 billion, ranking him as the 24th richest person in the world, trailing only Julia Koch and her family. Coinbase founder Brian Armstrong is the next richest person in bitcoin, at $11 billion.
CZ’s upward revision consists of two components. First, his 90% equity stake in Binance, the huge cryptocurrency exchange, is worth $33 billion, despite CZ stepping down as CEO in November 2023 as part of a settlement with the US Department of Justice in which he admitted to anti-money laundering and sanctions violations. His corporation also paid the authorities a punishment of $4.3 billion.
However, Zhao’s personal wealth was less affected because he just had to pay a $50 million punishment. Binance’s dominance in trading volume has expanded in the six months since his plea, despite being eliminated from Forbes’ list of the most trustworthy cryptocurrency exchanges. Data from The Block shows that the company’s share of the total spot market across exchanges has climbed to 42% in the six months following his departure, up from 38% in the previous two months.
Forbes discovered CZ’s personal holdings in his exchange-issued coin BNB, which we estimate to be 94 million tokens, or 64% of the total 147.5 million BNB tokens in circulation, resulting in a significant change in his net worth. Forbes reports that Binance owns 71% of the BNB supply.
Despite the exchange’s legal issues, BNB has surged 100% in 2024, outperforming other popular cryptos such as bitcoin (up 54%), ether (53%), and solana (49%). BNB has reached an all-time high of $714, giving it a market worth of $110 billion.
What is a BNB? Binance coin, or BNB, was initially established in 2017 as a fundraising tool for CZ’s new exchange. Tokens, such as BNB, are created by the developers running the crypto projects and are more akin to airline miles loyalty points than true equity shares in a corporation, despite trading on crypto exchanges like stocks and being sought after by investors. Tokens like BNB provide no ownership but instead reward holders, who are frequently clients, with trading discounts or as an incentive to recruit new account holders. According to one former FTX executive, whose company’s exchange token FTT contributed to its spectacular downfall, they are sometimes referred to as a “form of stock because there is no public equity.” The Securities and Exchange Commission appears to concur, since it is suing Binance for offering BNB to US clients as an unregistered security.
Changpeng Zhao, 47, built his BNB stash in two methods. Binance was founded in 2017, and he and the founding team earned 80 million tokens out of a total supply of 200 million BNB. Forbes’ forensic investigation of the wallets that acquired these tokens, carried out in collaboration with Gray Wolf Analytics, reveals that the corporation has 46.2 million of the original 80 million tokens. CZ is credited with 41.6 million BNB from this sum because he owns 90% of Binance.
The second aspect of CZ’s riches is more mysterious. According to a Forbes investigation done with Gray Wolf in October 2023, Binance’s ICO was initially undersubscribed, resulting in CZ and his firm funneling unsold shares into wallets under their control. In 2017, Binance claimed to have sold 100 million BNB for $0.15 apiece, raising a total of $15 million. Our investigation from last fall revealed that no more than 10.8 million BNB were sold, yielding less than $5 million.
Binance did not specify what would happen to any unsold tokens in its official white paper, which serves as a pseudo prospectus for ICO investors in the cryptocurrency sector. Finally, forensics reveal that they were deposited in wallets held by Binance. Today, we estimate that these wallets contain 58 million BNB, worth $35 billion at the current price of $602. CZ’s 90% ownership of Binance would result in little over 52 million more BNB. In sum, we believe he has roughly 94 million BNB coins. Binance and CZ’s lawyers did not respond to our requests for comment on CZ’s holdings.
Binance’s founder’s assets are worth $56.6 billion today, but because Zhao is unlikely to sell for that amount, Forbes assigned a 50% liquidity discount to his investment. Currently, BNB’s daily trading volume is around $1.6 billion in tokens.
Despite claiming to have 200 million customers worldwide, nothing is known about Binance’s internal operations—it has never been audited—and more than 53% of all BNB trading takes place on Binance’s own exchange. BNB has increased by nearly 5% in the last month, resulting in almost $3 billion in paper gains for Binance’s founder. So, while Zhao serves his four-month sentence in the yard of the Lompoc II federal correctional facility, basking in the California sun, he sees his BNB billions grow.