From $96 billion to $17.2 billion, why did Zhao Changpeng's wealth plummet?

• Zhao Changpeng's wealth has plummeted 82% from its peak.

• U.S. regulators are suing Binance, accusing it of a series of violations.

Sam Bankman-Fried, who is on trial in New York for fraud, isn’t the only cryptocurrency exchange founder feeling the heat.

The Bloomberg Billionaires Index cut its revenue forecast for cryptocurrency exchange Binance by 38% after data showed that its trading volume has fallen this year. As a result, the wealth of Binance founder Changpeng Zhao (also known as CZ) evaporated by $11.9 billion to $17.2 billion.

CZ, 46, played a role in Bankman-Fried's case being brought to federal court. In November, the founder of Binance announced that he would liquidate tokens associated with FTX after reports that Bankman-Fried's hedge fund Alameda Research also held a large position in FTX. Some FTX customers rushed to withdraw their funds, and the exchange was unable to keep up with the surge in withdrawals. Less than a week later, it declared bankruptcy.

That brings Bankman-Fried's own wealth to zero after peaking at $26 billion last March.

The index calculates Binance’s revenue using spot and derivatives trading data from cryptocurrency tracking services Coingecko and Coinpaprika.

Binance gained market share earlier this year, reaching 62% of the exchange’s total cryptocurrency trading volume in the first quarter, thanks to a zero-fee campaign for popular trading pairs. After the campaign, Binance’s share fell to 51% at the end of the third quarter, according to research firm CCData.

Binance did not respond to a request for comment.

In recent months, cryptocurrency exchanges have found themselves increasingly isolated from the traditional financial system.

The U.S. Securities and Exchange Commission (SEC) sued Binance in June, while the Commodity Futures Trading Commission (CFTC) also took action against it earlier this year for not following rules to allow U.S. users to access its platform. Regulatory officials claimed that the company lacked adequate anti-money laundering controls, manipulated trading volumes and mishandled customer assets. Binance denies the allegations and is fighting them in court.

In June, Binance.US announced that it would no longer trade in U.S. dollars, and trading volume shrank significantly, with the Bloomberg Wealth Index dropping its value to zero. Binance.US was valued at $4.7 billion in a funding round in March 2022, while CZ's net worth peaked at $96 billion in January of that year.

The pain isn’t limited to Binance, as regulatory uncertainty and rising interest rates make other investments more attractive. Coinbase Global Inc.’s spot trading volume fell 52% year-on-year in the third quarter, according to CCData.