More On: LUNA
Changpeng Zhao, who is still a billionaire, most certainly meant it as a joke, but luna's collapse has hurt investors worldwide.
The billionaire founder of crypto exchange Binance, Chanpeng Zhao, quipped on Tuesday that he was "broke again" after the exchange's assets in the bitcoin cryptocurrency dropped from $1.6 billion just a month ago to just $2,200 this week.
Zhao stated in a tweet on Monday that Binance, the world's largest crypto exchange, possessed 15 million luna tokens. Binance obtained these tokens in exchange for a $3 million investment in the Terra network, on which Luna is based, made in 2018. According to Zhao, its luna tokens were "never traded or sold" as of Monday.
Zhao has been contacted for comment by Insider.
Binance's luna holdings were valued at $1.6 billion in early April, when the cryptocurrency reached its all-time high. However, due to the latest crash, its value has dropped to around $2,200 this week. As of Thursday, the currency was selling for around $0.0001468.
In the last two weeks, the value of Luna has plummeted precipitously.
Its demise began two weeks ago, when its sister coin, TerraUSD, lost its link to the US dollar. The valuations of the two tokens are linked. When the price of TerraUSD dropped, investors raced to sell their shares in a scenario comparable to a bank run. TerraUSD's decline, in turn, drove down the price of luna.
According to Insider, the two coins' free fall was expected to have wiped off more than $50 billion in paper value.
Zhao encouraged the Terra team on Monday to first refund its ordinary investors. "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.
4/ Now the important part.— CZ 🔶 Binance (@cz_binance) May 16, 2022
To lead by example on PROTECTING USERS, Binance will let this go and ask the Terra project team to compensate the retails users first, Binance last, if ever.
Binance (after a 5 min discussion) fully support this proposal. 👇https://t.co/QnMx8aZ09A
Despite his comments, Zhao, 45, is not bankrupt. According to Bloomberg, he has a net worth of around $14.8 billion as of Thursday. According to Forbes, the majority of his fortune is likely derived from his estimated 70% share in Binance.
According to Forbes, Binance's market worth is six times that of its nearest competitor, Coinbase. According to MarketWatch, which cited a research issued by financial-services company Opimas, Binance earned approximately $14.6 billion in trading fees last year.
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