A Forbes report, citing forensic analysis by Gray Wolf Analytics, claims former Binance CEO Changpeng Zhao (CZ) owns a staggering 64% (roughly 94 million tokens) of Binance Coin’s (BNB) circulating supply. This translates to a significant chunk of the crypto exchange’s native token, raising questions about potential conflicts of interest.
CZ’s BNB Holdings and Wealth Accumulation
The report alleges that 80 million BNB tokens were initially allocated to the Binance founding team, with the company still holding onto 46 million. Combining this with CZ’s estimated 90% ownership of Binance, the analysis suggests that CZ and Binance jointly control a whopping 71% of the 147 million BNB currently in circulation.
Fueled by this substantial BNB stake and the recent price surge (doubling from $290 in January to over $724 in June), CZ’s net worth has reportedly skyrocketed to a staggering $61 billion, landing him the 24th spot on the Forbes’ richest people list.
BNB, the lifeblood of the Binance ecosystem, functions as the exchange’s utility token. Users can utilize BNB for fee discounts and various rewards on the platform. With a maximum supply capped at 200 million and over 153 million tokens circulating, the current market cap of BNB hovers around $91 billion.
Legal Troubles and Leadership Shuffle
It’s important to note that CZ’s road to wealth hasn’t been without bumps. In 2023, the US Department of Justice (DOJ) indicted both Zhao and Binance on charges of violating sanctions and money laundering laws. Facing these accusations, CZ, then the CEO, opted for a plea deal, admitting to violating the Bank Secrecy Act and stepping down from his leadership role. Richard Teng currently heads Binance.
The settlement stipulated a $50 million fine for CZ and a hefty $4.3 billion penalty for Binance. Additionally, the DOJ appointed an independent monitor to oversee Binance’s operations for the next three years. In April 2024, CZ received a four-month prison sentence, significantly lower than the three-year term prosecutors had requested.
The Lingering Question: Conflict of Interest?
The revelation of CZ’s significant BNB ownership raises concerns about a potential conflict of interest. While CZ is no longer directly at the helm of Binance, his vast financial stake in the company and its native token could create situations where his personal benefit aligns with market manipulation or decisions made for Binance’s gain, potentially impacting the overall health of the BNB ecosystem.
Moving Forward
As Binance continues to operate under a court-appointed monitor, it remains to be seen how CZ’s ownership of such a large portion of the BNB supply will affect transparency and investor confidence in the long run.
About The Author
