Binance CEO says he is ‘poor again’ after LUNA crash

Changpeng Zhao the Binance CEO has seen a large fall in net worth

Changpeng Zhao, CEO of Binance, speaking at the Delta Summit in 2018                                 
Changpeng Zhao, CEO of Binance, at the Delta Summit in 2018 – Photo: Alamy
                                

The CEO of Binance Changpeng Zhao has said he is “poor again” following the depegging of the stablecoin TerraUSD (UST) and the price crash of its sister token Terra (LUNA).

In a series of tweets, Zhao explained Binance invested $3m (£2.3m) in Terra in 2018, and received 15 million LUNA tokens in return, which at its peak was worth $1.6bn (£1.2bn).

The CEO added in another tweet that these LUNA tokens are not worth much now. According to CoinMarketCap as of 13:45 BST (UTC +1), UST is priced at $0.064 despite being tied to the US dollar and LUNA is $0.00018 with its all-time high set on 5 April 2022 at $119.18.

Binance asks to compensate retail users first

However, Zhao said he wanted to “lead by example on protecting users” and so asked the Terra project team to compensate retail users first and “Binance last, if ever”.

Still a billionaire though    

Despite stating he is “poor again”, Zhao is still worth $14.9bn (£11.8bn) as of 23 May, according to Bloomberg. However, the CEO’s net worth has taken a hit recently – it was valued at $60.9bn (£48.4bn) on 7 April.   

The CEO’s drop in net worth cannot be completely contributed to the depegging of UST and the price crash of LUNA. On the 11 April, Zhao’s net worth fell sharply, while UST and LUNA’s price falls did not occur until around 9 May.

At the start of 2022, Zhao’s net worth was put at $96.9bn (£77.05bn) and so far this year it has been on a downwards trend. He reportedly has at least a 70% stake in Binance, which accounts for the majority of his wealth.

Terraform Labs was dissolved days before LUNA price crash

It has also emerged that Terraform Labs, the company behind the Terra blockchain was dissolved days before the price crash of the UST and LUNA.

Two South Korean offices were also liquidated according to information from the country’s Supreme Court Registry Office. 

Due to the timing of this, it has raised eyebrows as not long soon after LUNA and UST's price started to drop.

Do Kwon the founder and CEO of Terraform Labs dismissed this as “purely coincidental”.

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