The cryptocurrency market has seen significant turbulence in recent times, with major players like Binance and FTX facing substantial challenges. In the latest developments, Binance's trading volumes have dwindled, leading to a 38% cut in its revenue projection by the Bloomberg Billionaires Index. This reduction has resulted in a decrease of $11.9 billion in the net worth of founder Changpeng Zhao, bringing it down to $17.2 billion.
Binance's market share in crypto trade also saw a dip from 62% in Q1 to 51% in Q3, following the end of a zero-fee promotion. Additionally, Binance's reputation has been further tarnished due to regulatory actions by the SEC and CFTC for poor money-laundering controls and mishandling of client assets.
In a related development, after learning that Alameda Research held a significant stake, Zhao liquidated an FTX-related token. This action led to massive withdrawals and eventually to the bankruptcy of FTX, wiping out the wealth of Sam Bankman-Fried.
In June, Binance.US halted dollar transactions which caused a sharp drop in trading volumes and devalued the company to zero from a $4.7 billion valuation in a March 2022 funding round. The platform also suspended USD deposits, stopped direct US dollar withdrawals, removed FDIC insurance, and introduced stablecoins and digital assets for withdrawals. These changes have affected banking partners and necessitated measures to safeguard the platform.
Amid these challenges, Coinbase (NASDAQ:COIN) Global Inc.'s Q3 trading volumes have also fallen by 52% year-over-year due to regulatory uncertainty and rising interest rates. Despite these setbacks, Binance still holds a central position in the crypto market with 51% of total on-exchange crypto trades as Q3 2023 concludes.
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