Weilun Soon
Wed, May 18, 2022
Changpeng Zhao, founder of Binance, joked he was "poor again" after the crypto luna took a dive.REUTERS/Darrin Zammit Lupi
Crypto exchange Binance's founder Changpeng Zhao tweeted "poor again" after crypto-token luna crashed.
Binance's holdings of the coin were once worth $1.6 billion but are now worth about $2,200.
According to Bloomberg estimates, Zhao is still a billionaire and Binance is the world's largest crypto exchange.
Chanpeng Zhao, the wealthy founder of crypto exchange Binance, joked on Tuesday that he was "poor again" after the exchange's investments in the luna cryptocurrency crashed from $1.6 billion just a month ago to about $2,200 this week.
In a tweet on Monday, Zhao said that Binance, the world's largest crypto exchange, held 15 million luna tokens. Binance received these tokens in exchange for its $3 million investment in 2018 into the Terra network that luna is based on. Its luna tokens were "never moved or sold" as of Monday, according to Zhao.
Insider has reached out to Zhao for comment.
Binance's luna holdings were worth $1.6 billion in early April when the token hit its peak price. But its recent crash saw that value shrink to about $2,200 this week. The coin is trading at about $0.0001468 as of Thursday.
Luna's value has rapidly plunged in the past two weeks.
Its implosion started when its sister token, TerraUSD, lost its peg to the US dollar two weeks ago. The two tokens' valuations are tied to each other. When TerraUSD's price fell, investors rushed to dump their holdings of that token in a scenario similar to a bank run. TerraUSD's plunge, 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, Insider reported on Sunday.
Zhao on Monday urged the Terra team to reimburse its retail investors first. "To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retail users first, Binance last, if ever," he tweeted.
Despite his comments, Zhao, 45, definitely isn't broke. He has a net worth of about $14.8 billion as of Thursday, based on Bloomberg's estimates. The majority of his wealth likely comes from his estimated 70% stake in Binance, according to Forbes.
Binance's market value is estimated to be six times that of its nearest competitor, Coinbase, Forbes reported in March. Binance took in about $14.6 billion in trading fees last year, according to MarketWatch, which quoted a report published by financial-services consultancy Opimas.
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