The wealthiest man in cryptocurrencies moves to Dubai as U.S. regulators target exchanges

When buying digital tokens named after the dog meme during the first few months of this year, at least some of the most advanced circles are perfectly rational to join the bright new future of finance. Cryptocurrency exchange was seen as a method Binance promoted a new low-risk way to participate in the action. It encouraged clients to invest in what is called Terra USD. Tokens were known in the industry as “stablecoins.” It’s a type of cryptocurrency that acts like a savings account and always promises to be worth $ 1. Binance said that this particular Stablecoin offered something special to customers who bought, sold and invested in various cryptocurrencies using its service: a promise of nearly 20% annual revenue. .. The Terra USD proposed by Binance to its clients could somehow be “safe” and “high yield”.

As crypto enthusiasts are familiar with, and as anyone accustomed to the rules of ordinary finance can guess, Terra turned out to be neither secure nor high-yielding. According to critics, the coin was a Ponzi scheme, the beginning of a collapse where Bitcoin prices plummeted, companies across the industry rushed to dismiss employees, and frozen customer withdrawals. Bitcoin has fallen by about 70% since its peak in November, and the industry calls this decline the winter of cryptocurrencies.

This was bad news not only for Binance itself, but also for investors caught up in enthusiasm. On May 16, CEO Changpeng Zhao revealed the extent of Binance’s own Terra-related losses. The company’s stock was worth $ 1.6 billion and is now close to zero. Zhao was not paying attention or issuing a warning. “So I have a few things,” he said in an interview that day. “I don’t really care about money.”

The comments when I drank $ 14 orange juice at a French restaurant at the Four Seasons Hotel in Dubai were just as incredible as the comments from the industry’s wealthiest man on money entirely. Zhao is slender and has a shaved head, a soft voice, and a wardrobe that looks like it consists only of a black binance shirt. He is also like a cipher. Depending on who is speaking, he a) a group of vertically integrated digital currency giants (including competitors such as Binance and FTX) are taking over not only the global stock exchanges but the entire global financial order. It is pioneering an alternative and innovative system, or b) operates the world’s largest unlicensed casino.

Back in January, Zhao (Cryptographic Speaker CZ) was one of the ten wealthiest people in the world, at least in paper. According to the Bloomberg Billionaires Index, his net worth rose with the price of Bitcoin, dropping from $ 96 billion to $ 11 billion. Still, Binance remains the largest cryptocurrency company, processing more transactions than the following four exchanges combined. Over $ 50 billion goes into the hands of the platform every day, which usually costs a 0.1% fee. In reality, this means that Zhao, the company’s largest shareholder, makes money regardless of whether the customer buys or sells. “In fact, it was elasticity that surprised me,” he said, referring to Terra’s collapse. “There is no bailout. There is no central bank. There is no government intervention.” The market plunge continued, but there was not much to see in Zhao’s mind. He said the industry is moving forward.