Binance billionaire founder says he’s ‘poor again’ after Terra LUNA plunges to a new low
Changpeng Zhao, billionaire founder of the crypto exchange platform Binance, in a tweet on Monday quipped that he is “poor again” after his cryptocurrency LUNA holding came crashing down to $2,200 from $1.6 billion high in April.
Binance, one of the largest crypto exchange platforms, held 15 million LUNA coins. As of date, 1.4 million transactions per second are done on Binance and its average daily volume is around 2 billion. The company received these tokens in 2018 in exchange for the $3 million investment in the Terra network that LUNA is based on. Its holdings were worth $1.6 billion in April, when the token was at its peak. The token traded at about $0.0001468 on Thursday.
Terra LUNA is a blockchain protocol using pegged cryptocurrency coins, was founded by Daniel Shin and Do Kwon in January 2018. A pegged cryptocurrency is tied to a bank or government issued currency, such as USD. LUNA’s early investors were Binance, OKEx, and Huobi with a total investment of $32 million.
LUNA is based on its sister token, TerraUSD, also known as UST and the two token’s valuations are dependent on each another. TerraUSD lost its peg to the USD and when its price moved south, investors panicked to sell the so called ‘stablecoin’. In turn, LUNA’s market value plunged in a similar manner. The panic selling is estimated to have wiped out more than $50 billion in paper value.
Terra Labs CEO Do Kwon, in an attempt to save its peg and bring stability to TerraUSD, said that the company would support the Terra ecosystem with an investment of $1.5 billion via a not-for-profit organization, Luna Foundation Guard. This investment also includes $750 million worth of crypto currency loaned out to trading platforms to “protect the UST peg” and further $750 million UST “as market conditions normalize”
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On Monday, Zhao recommended TerraUSD team to pay back the retail investors who lost their money. He went on further to tweet that “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,".
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Despite his statement of “poor again”, Zhao definitely is far away from poor. According to Bloomberg Billionaire Index, Zhao is worth about $14.8 billion but has also lost $81 billion this year till date. Forbes also estimates that the majority of his worth is due to his 70% ownership in Binance.
In March, Fortune reported that Binance’s Equity value is estimated to be 500% more than its closest competitor, Coinbase. According to a report by Opimas, Binance took around $14.6 billion in trading fees in 2021.
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