On May 17, Mr. Zhao shared a Fortune article on his personal page with the comment: “Poor again”. It is known that Binance’s investment in cryptocurrency Luna has plummeted from $1.6 billion just a month ago to $2,200 this week.
Chengpeng Zhao. (Photo: Reuters)
In a tweet posted on May 16, Mr. Zhao said that Binance – the world’s largest cryptocurrency exchange – holds 15 million Luna tokens after investing $3 million in the Terra network in 2018. According to Mr. Zhao, the exchange never touched these tokens.
In early April, when the Luna coin peaked, 15 million Luna was worth about $1.6 billion. However, now, they are only about 2,200 USD. The coin was trading at 0.0001468 USD on May 19.
Over the past two weeks, Luna has fallen vertically after the TerraUSD token lost its peg to the USD. The value of the two tokens is inextricably linked. When the price of TerreUSD fell, investors quickly sold off, leading to the plunge of Luna. According to Business Insider, TerraUSD and Luna in free fall resulted in more than 50 billion USD in paper being “evaporated”.
Mr. Zhao urged the Terra development team to compensate retail investors first and Binance last to protect users.
Despite his “poor again” comment, Mr. Zhao, 45, is still a billionaire. According to Bloomberg estimates, his net worth is about 14.8 billion USD as of May 19. Most of the wealth comes from a 70% stake in Binance, according to Forbes magazine. The market value of Binance is said to be 6 times that of its nearest competitor, CoinBase. Binance raked in $14.6 billion in transaction fees in 2021, according to MarketWatch.
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