Ousted Binance founder Zhao Changpeng’s fortune grew by $33 billion in 2023

PORTLAND, Oregon – He may be headed to prison in 2024 after

pleading guilty to US criminal charges in November,

yet 2023 held a silver lining for former Binance Holdings chief executive Zhao Changpeng: His estimated wealth ballooned by almost US$25 billion (S$33 billion) in 2023.

Towards the end of a year when Bitcoin rebounded more than 160 per cent following a market collapse in 2022, Zhao tops a list of crypto entrepreneurs who saw their estimated net worth surge in 2023, according to the Bloomberg Billionaires Index.

Coinbase Global CEO Brian Armstrong and twin brothers Cameron and Tyler Winklevoss also had billions of dollars restored to their fortunes.

“Investment in crypto is not for the faint of heart; you need to be prepared for the spectacular ups and downs,” said Duke University finance professor Campbell Harvey, who studies digital-asset markets. “There is a reason that these investors are billionaires, and it is not luck. They are not tempted to dump their holdings in down markets. They believe in the long-term opportunities this space offers.”

The growth in wealth for Zhao is more than five times the size of the US$4.3 billion in fines that Binance agreed to pay to the United States authorities.

His fortune, currently estimated at more than US$37 billion, is derived from his controlling stake in Binance, the world’s biggest crypto exchange, which he founded.

Even though Binance has lost some market share in 2023, the exchange has benefited from increases in trading volumes that accompanied the rebound in crypto markets.

In November, he and Binance pleaded guilty to anti-money laundering and US sanctions violations under a sweeping settlement with the US that allows the crypto exchange to continue operating.

Zhao also agreed to

personally pay a US$50 million fine

under the deal that required him to step down as CEO, but lets him retain his ownership stake in the exchange.

Zhao faces as many as 10 years in prison yet is expected to get no more than 18 months under a plea deal that appears to have saved him from the harsh penalties that other prominent crypto criminals have faced.

His sentencing is scheduled for Feb 23.

Zhao’s wealth is still a far cry from its peak of nearly US$97 billion at the beginning of 2022.

He also is not the only billionaire who benefited from the crypto rebound in 2023, which was fuelled in part by the Binance settlement that removed an overhang from the market, as well as by optimism that the US will finally approve exchange-traded funds (ETFs) that invest directly in Bitcoin.

Here are some of the other big crypto winners in 2023:

Coinbase Global CEO Brian Armstrong’s wealth has risen by US$5.8 billion year to date to US$7.2 billion. Coinbase’s shares have rallied almost 400 per cent so far in 2023, and Mr Armstrong is calculated to hold about a 16 per cent stake in the firm.

Twin brothers Tyler and Cameron Winklevoss, who co-founded the Gemini Trust crypto exchange and have stockpiled millions of Bitcoin, have each seen their wealth balloon by US$1.4 billion in 2023 to US$2.7 billion.

Gemini has been locked in a months-long battle with crypto lender Genesis and its parent company Digital Currency Group (DCG) over a joint crypto lending programme.

The US Securities and Exchange Commission has alleged that the so-called Earn programme represented an unregistered offer and sale of securities.

The New York Attorney-General

sued Gemini and DCG for allegedly defrauding customers of US$1.1 billion.

DCG founder Barry Silbert’s wealth grew by US$1.5 billion in 2023 to an estimated US$2 billion. DCG has been selling off or closing businesses in the past year in the wake of subsidiary Genesis filing for bankruptcy in January.

Mr Silbert just resigned as chairman of Grayscale Investments, which is vying for US approval to convert the world’s biggest Bitcoin trust into an ETF.

On the other hand,

the imprisoned Sam Bankman-Fried,

the former CEO of crypto exchange FTX who has been convicted of massive fraud, has an estimated net worth that is holding steady at US$0, after peaking at US$25.9 billion in March of 2022.

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