Did Binance Founder Changpeng Zhao Lose Billions in Prison?
Changpeng Zhao, the founder of Binance, was likely still generating significant wealth despite his confinement in California’s Lompoc II detention center. Recently released from prison, Zhao concluded his sentence two days ahead of schedule, leading to debates about his financial status during incarceration.
According to Bloomberg's analysis, Changpeng Zhao experienced a substantial decline in his net worth while in prison. As of June 2, his wealth was estimated at $36.5 billion, which dropped to approximately $30.8 billion by September 27. Bloomberg's conservative methodology valued Zhao's holdings in Bitcoin (BTC), Binance Coin (BNB), and Binance.us at zero, and it discounted his equity in Binance.com by 50%, based on the valuations of competitors like Coinbase and Galaxy Digital.
In contrast, Forbes challenges Bloomberg's calculations. While Bloomberg claims Zhao's wealth diminished, Forbes suggests that he could have earned billions while imprisoned, estimating his net worth at $61 billion on the same date. This implies a daily income of around $25 million during the four-month incarceration.
Forbes did not fully disclose its methodology, but its data indicates Zhao's net worth was $33 billion on May 7 and $57.8 billion on July 12. This discrepancy suggests that Forbes may include Zhao's crypto holdings with a less conservative discount on his Binance equity. If accurate, this suggests that Zhao might have gained at least $3 billion during his prison term.
Forbes' valuation primarily focuses on wealth derived from equity in privately held Binance-affiliated companies. If this assessment holds true, it indicates that Zhao made more money during his prison term than many executives earn throughout their careers. As reported, Zhao was released from prison on September 27, having served 117 days at Lompoc II, a minimum-security facility located near Santa Barbara.
It is essential to note that these figures are estimates, as the Binance-affiliated firms where Zhao owns equity are private entities, and he has no obligation to disclose his assets publicly. Bloomberg rated its confidence in the estimation at one out of five, reflecting a low level of certainty.
