Binance’s Changpeng Zhao Clings To Multibillion-Dollar Fortune After Guilty Plea

On his way to the heights of crypto, Changpeng Zhao postured as though he couldn’t be bothered with the concept of his wealth. “I don’t really know what my net worth is. I’m not too bothered about it,” he told Forbes in the summer of 2021.

On Tuesday, U.S. prosecutors painted a different portrait of Binance’s chief. Zhao, who goes by CZ, pled guilty to federal money laundering charges, admitting to skirting U.S. regulations and evading sanctions laws on his quest for crypto market dominance, which in turn bolstered his fortune.

“The purpose of the conspiracy was to allow… to gain market share and profit as quickly as possible,” the U.S. complaint states. Zhao, in addition to stepping down as CEO, has agreed to pay $50 million in the Department of Justice case, while Binance is on the hook for $4.3 billion–one of the largest ever corporate penalties. Zhao also faces up to ten years in prison. (To resolve a separate case brought earlier this year by the Commodity Futures Trading Commission, Zhao must also pay a $150 million fine.)

Though Zhao is barred from involvement with Binance for three years, he gets to keep his majority stake in Binance, which means he may emerge from his plea deal as one of the richest convicted felons in the world–and still by far the wealthiest person in crypto.

Zhao’s estimated 90% stake in Binance, which accounts for the vast majority of his fortune, is now worth an estimated $15 billion, Forbes estimates. That’s up from $10.5 billion in April, when Forbes published the 2023 World’s Billionaires list. Binance has generated upward of $3 billion in revenue the last 12 months, Forbes estimates, based on an analysis of the exchange’s spot and derivatives trading volumes (as tracked by CoinGecko), while also accounting for Binance’s alleged spoof or wash trades, which create the appearance of more customer activity than actually exists. (Binance has denied this.)

A recovery in crypto markets has driven up Binance’s valuation. Bitcoin’s price, a barometer of the industry, has more than doubled this year to date to $36,500 as crypto markets rallied in the aftermath of FTX’s implosion. Shares of Coinbase, a Binance competitor, have more than tripled since early January. Collectively, the market value of major cryptocurrencies has grown by $600 billion this year.

Despite the tailwinds in crypto, Binance now faces its own unique reality, one in which an independent compliance monitor will supervise its activity for three years and report its findings to the U.S. government. Those constraints may hamper Binance’s revenues, threatening its position as the leading global crypto exchange.

“Their influence and market share is going to drop precipitously,” says Mike Alfred, a crypto investor and longtime critic of Zhao and Binance. “The world in which Binance was winning and gaining market share was a world in which anything could be done at any time if it suited CZ, [and] if there was a profit in it.”

Whether Binance is able to maintain its market share as a cryptocurrency exchange will determine the direction of Zhao’s fortune. Binance facilitated 32% of spot trades and 50% of derivatives trades in October, according to a report from CCData – though its share in spot markets has declined for eight consecutive months, per the report.

Alternatively, Tuesday’s plea deal could help Binance by removing the cloud that’s been hanging over its head, says Owen Lau, a crypto and financial exchange analyst at Oppenheimer & Co. “People concerned by the prosecutors have left [Binance] already. Today’s announcement gives them some comfort that they can come back,” Lau said on Tuesday. “To me, it could have some positive effect on Binance. The super downside – that Binance becomes a dead business – has not played out. They’re still operational.”

Richard Teng, Binance’s newly appointed CEO, insists the company is positioned for future growth. “The fundamentals of our business are VERY strong,” he said in a tweet.

Since the news of the plea deal came out, Binance has experienced a net outflow of about $956 million on Ethereum, though its total crypto holdings remain above $65 billion, according to tracking site Nansen. “At the time of writing, withdrawals are continuing, and we’re not seeing a mass exodus of funds,” Nansen tweeted this morning.

As part of the settlement with the DOJ, an independent compliance monitor will be surveying Binance. As a result, the exchange will bleed customers as it falls behind more agile competitors, predicts Alfred. “If you went down the list of things that need to be fixed at Binance, it’s literally thousands of bullet points long,” Alfred says. “Other ventures that are coming up that are more growth oriented will take share.”

Zhao, a programmer by training, founded Binance in 2017 with a $15 million crowdsale. From its early days, Binance was favored by crypto traders and developers for its speed of execution and new products. Zhao’s tolerance for risk and brash approach fueled the company’s growth, but also put Binance on the radar of financial cops and regulators. “Wherever I sit, is going to be the Binance office,” he infamously told Coindesk in 2020.

China, Singapore and Malta were all way stations for Zhao and a small group of loyal lieutenants, until regulatory pressures forced them to remain on the move. Binance attempted to set up a European homebase in London, only to be spurned by regulators and accused of fraud by partners. Zhao ultimately moved to the United Arab Emirates; he’s lived in Dubai since 2021.

The company’s growth fueled a lavish lifestyle for Zhao. Using offshore entities controlled by his longtime deputy Heina Chen, Zhao splashed out $55 million for a private jet, spent $11 million on a yacht, distributed $62.5 million to one of his personal bank accounts, and directed another $178 million to two Singapore companies controlled by Zhao and Chen, according to the Securities and Exchange Commission, which filed charges against Zhao and Binance in June. The SEC alleged that Binance sold unregistered securities to U.S. customers. (Zhao and Binance deny the allegations and continue to fight the SEC charges, which are separate from those settled this week.)

Forbes’ $15 billion net worth estimate for Zhao does not include a personal investment portfolio. But he could have one worth several billion dollars, depending on how much of Binance’s profits he squirreled away for himself over the years. He previously told Forbes that he owned about 1,400 Bitcoins – currently worth about $36 million.

Zhao could even stage a return to Binance’s leadership after the company’s three-year period of supervision by an independent compliance monitor, according to the plea agreement.

In the meantime, Zhao plans to “probably do some passive investing” in crypto, AI and biotech, he said in a tweet on Tuesday. Zhao previously told Forbes he intended to donate between 90% and 99% of his wealth to charitable causes. “Hopefully, sooner than later,” Zhao had said. There was no mention of charitable giving in his recent tweet.

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Checks & Imbalances: New York AG ‘Identified Likely Omissions’ In Trump Organization’s Response To Subpoenas

Today we look at the latest news from Donald Trump’s ongoing trial in New York.

This Is The Evidence Forbes Has That Trump’s Former CFO Lied Under Oath

Donald Trump’s former chief financial officer, Allen Weisselberg, testified last week in a fraud case that the New York attorney general is waging against the former president and his associates, including Weisselberg, reports Dan Alexander. During that testimony, Weisselberg lied about Trump’s penthouse apartment at Trump Tower, saying “That was never a concern of mine. I never even thought about the apartment.”

Forbes published a story last week laying out the truth. “A review of old emails and notes, some of which the attorney general’s office does not possess, show that Weisselberg absolutely thought about Trump’s apartment—and played a key role in trying to convince Forbes over the course of several years that it was worth more than it really was,” the story said.

Weisselberg’s testimony abruptly stopped after the article came out. Citing the story, the attorney general’s office explained to a judge in a letter dated October 18th that it identified “likely omissions from production around inquiries from Forbes in 2016.” The attorney general’s office went on to suggest that a monitor should conduct a forensic examination of Trump Organization data to make sure that the real estate firm produced all required documents.

Forbes does not know whether the Trump Organization produced all of its documents. The evidence that Forbes has that Weisselberg lied, which the attorney general’s office certainly does not have, is a collection of notes taken by Forbes reporters who were in touch with the Trump Organization over the years while estimating the size of Trump’s fortune. It is those notes that show Weisselberg thought about his boss’ penthouse a lot—contrary to his testimony—and that he consistently pushed Forbes to overvalue it.

MORE FROM FORBESThis Is The Evidence Forbes Has That Trump’s Former CFO Lied Under Oath

Tracking Trump

How Trump Fooled Deutsche Bank

The New York attorney general is suing Donald Trump and his associates for allegedly lying about his net worth to financial institutions, something he also did for years when speaking with reporters. Why would someone so rich care so much about what people thought he was worth? “It was good for financing,” Trump said in a 2015 interview with Forbes.

But despite Trump’s bluster, it long remained unclear whether his lies actually were good for financing. After all, banks conduct due diligence on borrowers. But documents submitted into evidence during the trial last week show that Trump’s longtime go-to lender, Deutsche Bank, fell for many of his lies, giving the bank a distorted view of its most famous client, reports Dan Alexander.

MORE FROM FORBESHow Trump Fooled Deutsche Bank

Trump Told CFO He Wanted Net Worth To ‘Go Up’ On Financial Statements, Exec Testifies At Trial

Former President Donald Trump told his ex-CFO Allen Weisselberg he wanted his net worth to “go up” on financial statements, a Trump Organization executive testified in court Monday, reports Alison Durkee. New York Attorney General Letitia James is arguing that the ex-president and his company committed fraud by intentionally inflating the value of their assets.

MORE FROM FORBESTrump Told CFO He Wanted Net Worth To ‘Go Up’ On Financial Statements, Exec Testifies At Trial

Trump’s SPAC Now Says Its 2021 Financial Statements ‘Should No Longer Be Relied Upon’

The company planning to merge with Trump Media & Technology Group, owner of the Truth Social platform, has now walked away from two years of financial statements after informing the Securities and Exchange Commission on Monday that its audited financials for 2021 “should no longer be relied upon.”

In May, Digital World Acquisition Corp issued a similar notice to the SEC regarding its financial statements for the year ending Dec. 31, 2022.

MORE FROM FORBESTrump’s SPAC Now Says Its 2021 Financial Statements ‘Should No Longer Be Relied Upon’

By The Numbers


The amount the campaign of Rep. Ronny Jackson (R-Texas) spent at the Amarillo Club in July and August, according to filings made last week. In December 2021, the Office of Congressional Ethics found “substantial reason to believe” that Jackson violated the law by previously spending campaign funds at the club. The investigation moved on to the House Ethics Committee. In May 2022, that panel disclosed that it’s still investigating the matter. It has not provided another update.


The number of NDAs that were scrapped after a federal judge formalized a settlement agreement last week between Trump’s 2016 campaign and staffers.


The number of accounts the Biden campaign is following on Truth Social—just Donald Trump’s.

House Democratic Lawmaker Floats George W. Bush For Next Speaker Of The House

On “Forbes Newsroom,” Rep. Brad Sherman (D-Calif.) floated the idea of electing former President George W. Bush the next Speaker of the House.

From The News Desk

Here’s How Much Chris Christie Is Worth

Plenty of politicians make big money after leaving office: Just ask Nikki Haley, Mike Pence or Joe Biden, who all tapped into tried-and-true moneymaking methods for political figures—writing books, giving speeches, doing consulting or sitting on boards. But of all the people running for president today, nobody has played the game better than Chris Christie, reports Kyle Mullins.

The former New Jersey governor and his wife, Mary Pat, reported $1 million to $2 million in assets when Christie left office in 2018, plus a $1.3 million house in Morris County, New Jersey. Today, the couple is worth $15 million, according to Forbes’ estimates, meaning their net worth has roughly quadrupled. The Christies now have two homes in the Garden State, worth roughly $6 million total, plus a sizable portfolio of investments, a large pension from Christie’s law firm and two smaller ones from his time in government.

How’d they build such a big fortune in such a short period of time? By doing what Haley, Pence and Biden did, but on a bigger scale. Christie, a lifelong public servant who was among the poorest 2015 presidential hopefuls, is now one of the richest people vying for the Oval Office in 2024.

MORE FROM FORBESHere’s How Much Chris Christie Is Worth

Here’s How Much House Majority Leader Steve Scalise Is Worth

House majority leader Steve Scalise (R-La.) came up short in his battle to secure the 217 votes needed to replace ousted House speaker Kevin McCarthy (R-Calif.). But with the GOP still unable to coalesce behind a colleague, who knows what’s next? The New Orleans native has never run from a fight, rapidly returning to Congress after he was shot by a left-wing extremist in 2017—and again in September, after announcing he was diagnosed with cancer in August.

If Scalise does come back to claim the speakership, he will earn his second pay raise in less than a year, a $30,100 bump from his current $193,400 Congressional salary, reports Matt Durot. That would be substantial for the 58-year-old Scalise, whose nearly 30-year government career has yielded him a net worth of about $350,000, according to Forbes’ estimates.

MORE FROM FORBESHere’s How Much GOP House Speaker Nominee Steve Scalise Is Worth


Digital World Acquisition Corp. announced plans to merge with Trump Media & Technology Group in October 2021. In the two years since the intended deal was made public, what has not happened?

a. The SEC charged a former Digital World board member and two others with insider trading of the stock.

b. Digital World settled fraud charges with the commission for “making material misrepresentations” in its pre-IPO filings.

c. Investors backed out of $467 million in commitments.

d. The merger was finalized.

Check if you got it right here.

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Who Is Anthony Pratt, The Australian Billionaire Trump Reportedly Told U.S. Nuclear Secrets?

Donald Trump shared sensitive details about America’s nuclear submarine fleet with a member of his Mar-a-Lago club, who then went on to share the information with 45 others, according to an ABC News report. Who is that Mar-a-Lago club member? Australian cardboard box kingpin Anthony Pratt, a fixture on Forbes’ ranking of the World’s Billionaires for the past decade. Forbes profiled Pratt in 2015, back when the “affable, orange-haired” mogul had just invested $450 million in his U.S. operations, including a $260 million paper mill in Georgia. His net worth was an estimated $3.4 billion. In the years since, Pratt has befriended Trump in a big way. He won $350,000 by betting $75,000 on Trump to win the 2016 election, then started throwing real money around, pledging in 2017 to invest $2 billion in American manufacturing over a decade. Front-and-center, giving him a standing ovation: then-president Donald Trump. In 2021, Pratt broke ground on a $500 million paper mill and box factory in Kentucky. In the era of online shopping, where everything comes in a box, Pratt is now worth an estimated $11.1 billion.

Here is Forbes’ 2015 profile of Anthony Pratt, the Australian box billionaire with friends in high places, republished in full.

When Anthony Pratt, the affable, orange-haired Australian billionaire behind America’s biggest maker of fully recycled cardboard boxes, takes you on a tour of his factory in Valparaiso, Ind., you’re bound to stop for the bronze plaque outside: “Dedicated by Muhammad Ali on July 15, 2000.” “I like to say we’re the second-greatest boxer of all time,” Pratt chuckles.

Well-worn jokes and a friendship with Ali aren’t the only things he has to be happy about. His privately held Pratt Industries is one of the fastest-growing players in America’s $35 billion corrugated packaging industry and the only big boxmaker using 100%-recycled paper. By taking the nation’s paper trash—yellowed newspapers and greasy pizza boxes—and turning it into new packaging, Pratt has helped bolster a personal fortune FORBES estimates at $3.4 billion, while saving some 50,000 trees a day. That’s especially significant in today’s world of online shopping, where everything comes in a box. “We were in recycling before recycling was cool,” says Pratt, 55.

In the past 15 months alone the company, based in Conyers,Ga., has invested nearly $450 million in America, most notably constructing a $260 million paper mill (the company’s fourth) next to the Ali-autographed box factory in Valparaiso. The firm does $260 million in Ebitda (on $2 billion in sales), and Pratt thinks it will surpass $300 million once the new mill—driving his first big push into nearby Chicago, one of the largest box markets in the U.S.—comes online in September. In total the company operates more than 130 sites, including paper mills, box factories and distribution centers, across 26 states and Mexico, churning out more than 3,000 tons of paper every day. That’s enough to create 12 million boxes, all without cutting down a single tree. “They’re the upstart player in the industry,” says Mark Wilde, managing director at BMO Capital Markets. “It’s a remarkable story.”

Pratt’s journey began at a single wasteful paper mill in Macon, Ga. in 1991. That’s when he was dispatched to the U.S. from Australia, where his family operated Visy, a recycled-packaging juggernaut founded by his grandfather in 1948. (Today Pratt Industries and Visy operate as sister companies, both run by Pratt.) Arriving in the country he quickly saw a gap in the market. Everyone was making paper from trees. Why wasn’t anyone just recycling the stuff heading for the landfills, as Visy did in Australia? He soon shuttered the Macon mill and focused on recycling the waste produced by competitors.

That decision—made more than a decade ahead of the recent consumer-driven outcry for greener products—unleashed a domino effect of efficiency. Unlike his rivals, who must operate mills close to timber sources and then send the paper to factories near cities, where it’s turned into boxes, Pratt situates operations where they make the most logistical sense: near cities, which are full of waste—and customers—thereby cutting transportation costs.

And because he’s relatively new to the U.S. market and builds his own factories—rather than acquiring existing plants, like most of his competitors—Pratt’s facilities are some of the most advanced and efficient in the industry. He builds cheap by owning his own construction company, one that specializes in making mills on budget. Newer technology and the relative simplicity of the recycling process allow his mills to employ just a quarter of the staff his competitors do. “We’re building the space shuttle competing against other people who are still flying Spitfires,” he says.

Still, he’s dependent on his competitors to keep pumping out more paper to be thrown away, collected and sent to his mills. After all, paper fiber can be recycled only so many times before it starts to disintegrate. But given the size of America’s paper market and how entrenched his competitors are in the standard (and profitable) method, he’s bullish about the future.

He sees Pratt Industries, which controls less than 5% of the U.S. market, doubling in size to more than $4 billion in sales in the next seven years while global sales grow to $10 billion. That includes $1 billion from his newly launched California operation, a play into the state’s massive fruit and vegetable market. Pratt is also cozying up to big shippers like Amazon and the U.S. Postal Service, betting that the rise of online retailing will translate to more boxes being sent directly to consumers who want to see sustainable products. And Pratt continues to expand one of his most successful product lines: lightweight packaging.

He’s also dependent on U.S. companies to keep pumping out products to be boxed, tethering him to American manufacturing. That puts him in a position many might find uncomfortable, yet Pratt is happy to rely on a sector many once counted out. Industry is booming, according to Pratt, and the country’s regenerative nature is more than enough to carry a young boxer a few more rounds. “My policy in America is ‘steady growth is forever,’ ” says Pratt. “We think sustainability is a wave that’s not going away anytime soon.”

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Aviator Nation Founder Walks Back Plans For Retail Cuts After Backlash

It’s not all rainbows and smiley faces at popular clothing brand Aviator Nation. Founder Paige Mycoskie, one of the wealthiest self-made female entrepreneurs in the U.S., set off a frenzy at her company last week after calling for sudden cuts to Aviator Nation’s retail staff – and then jetting off on a week-long Hawaii vacation.

The 43-year-old Mycoskie, who owns 100% of the business, known for its, yes, pricey smiley-faced sweatpants and rainbow-striped hoodies popular among TikTok teens and twenty-somethings, then appeared to back track on the plans, which involved slashing the hours worked by many employees in the company’s 17 stores.

“We drafted new guidelines for retail employee scheduling in order to provide additional structure as we continue scaling the business,” Mycoskie said in a statement shared via an Aviator Nation spokesperson late on Thursday, a day after she returned home to a barrage of staff complaints and to questions from Forbes about her plans. (She had outlined retail expansion plans in a Forbes article weeks earlier).

“With our continued growth, this was intended to provide the team with more structure and support, however, once we released the new guidelines it came to my attention that the team is concerned with the proposed changes,” Mycoskie’s statement continued. An Aviator Nation spokesperson denied that the changes related to any decrease in retail sales at the company.

The founder added that all plans for layoffs or cutbacks on employee hours are “currently on hold while we review and address the team’s concerns.” The company said Friday afternoon that Mycoskie had alerted her team and that “the modified schedule was not put into place yet.” However, as of Friday evening, two employees and one store manager told Forbes that employees’ hours had already been reduced and that they’d heard no news yet of reversing those changes.

Forbes was contacted on June 13 by two employees at Aviator Nation’s location in Laguna Beach, California, who said they were pulled into an emergency meeting earlier that day and informed that most of their team would likely be let go following new orders from HQ. By the next day, the employees, who asked to remain anonymous for fear of retribution, said they were updated that there wouldn’t be layoffs at their store but that both full-time and part-time employees–a number of whom were invited back to work this summer after working at the company last year–would instead see their hours significantly reduced. (An Aviator Nation spokesperson said it is “categorically false” that employees at this store were ever told they could be laid off.)

The Laguna Beach store would usually have up to seven people on the sales floor, but the new requirements called for a maximum of three during weekdays and four during the weekends, according to the store employees. One of the sales associates said they were told they would be reduced from working five days a week to one day a week, which meant they would have to look for another job and therefore it had a similar impact to being laid off. “We never thought something like this would happen at Aviator Nation since Paige talks so much about how she prioritizes her employees,” this person said.

Employees at two other Aviator Nation stores told Forbes that workers’ hours were diminished at their locations, too, though the cuts varied by store. The Aviator Nation store in Austin was told to have fewer people on the sales floor, according to two employees there (this is the closest store to Mycoskie, who divides her time between her homes in the Texas capital and Aspen, Colorado–where she recently splashed out $20 million for her ninth home). Meanwhile, an employee at Aviator Nation’s Venice Beach location says part-time workers at their store were also reduced to one day a week. “I will probably not be with the company by the end of the month,” this person said.

Adding to employees’ grievances about the situation was the fact that Mycoskie was on vacation in Hawaii when the new guidelines were sent through to employees. She was out of the office from at least Wednesday June 14 and returned on Wednesday June 21. A company spokesperson described this as a “scheduled family vacation.” Over the weekend Mycoskie posted a video of herself beachside and a selfie to her Instagram story with the caption, “Island life.” “She’s posting like inspirational quotes on her story though and I’m like girl what???” one sales associate said in a text.

Forbes recently highlighted Mycoskie as one of the richest self-made women in the U.S. with an estimated net worth of $380 million. In an April interview, she stressed Aviator Nation’s growing sales, which increased from $110 million in 2021 to $130 million in 2022, and new store openings in New York City and Nashville in the coming months; the company just opened a location in The Hamptons. She made no mention of any plans for impending layoffs. “I do believe it’s important for the long-term success of the company to keep brick and mortar,” Mycoskie said at the time, though she noted that most of the company’s revenue came through its online channels instead of the stores.

Though she has since hit pause on her plans for a retail shakeup, some employees painted the saga as reflective of broader management issues at the buzzy clothing company. Aviator Nation also halted the introduction of new mandatory “uniforms” that proved unpopular among some employees, who complained about wearing the long-sleeved, black “flight suits” (they retail for $350 a pop on Aviator Nation’s website) they were sent in hot climates like California and Texas. “We look like we’re about to go and change a tire,” said a sales associate at the Austin store.

“[Paige] is on vacation quite a bit,” said one store manager, also speaking on the condition of anonymity. The manager said the company’s founder has been “pretty out of the loop on what’s going on in retail stores for quite a while by choice… Recently her attention was turned back to stores and she realized we have ‘too many employees.’” The Venice Beach sales associate and a sales associate at Aviator Nation’s Austin location said they rarely see Mycoskie at their locations.

A company spokesperson responded that Mycoskie, who launched Aviator Nation back in 2007 while working part-time at a Venice Beach surf shop and grew it over the years with no outside funding (as detailed by Forbes in a 2022 profile), remains “very involved in every aspect of her business including the retail stores but she also trusts her leadership team to manage their departments, especially as the company continues to grow.” The spokesperson said that Mycoskie still visits stores weekly and “reviews photos of the ones she is not visiting as often regularly.”

The Venice Beach sales associate also highlighted a cliquey environment at the company (“All of Paige’s friends are hired and her girlfriend works for her,” said the employee, referencing Mycoskie’s girlfriend Jessica Jean Martin who is the company’s head of social media and partnerships) as well as what they said appeared to be over-the-top spending. They say Aviator Nation was flying many of their colleagues back and forth to the company’s new store in The Hamptons for the store’s May opening. “They did it in this crazy way where they fly one person there for a few days and then fly them back and then fly another person there,” said the employee. This company spends money like just down the drain.”

“We did fly members to the East Coast in order to build-out our new East Hampton and NYC shops and get those stores up and running,” said the Aviator Nation spokesperson. “We do offer the team the opportunity to travel to wherever the business may need them… Our employees consider these opportunities ‘perks.’”

Another speed bump at the trendy retailer: an uptick in customer complaints after the company’s Memorial Day sale, say three employees. The company was unable to facilitate the massive influx in orders that came in after the brand marked prices down by 40% and has been flooded with complaints from customers either receiving the wrong orders or still waiting for updates on orders they placed in May. Dozens of comments from disgruntled buyers on many of Aviator Nation’s Instagram posts prompted Mycoskie to respond from her personal Instagram on multiple posts between June 6 and June 11 that the company received “about 4x the amount of orders we typically have during a big sale” and the team was “overwhelmed.”

But a Laguna Beach sales associate says the company had the same issue last year with its Black Friday sale. “This is an issue that happens every single time that we have a sale,” this employee said. “And then even though people haven’t received their items from that sale, we had another Father’s Day Sale.” Aviator Nation says that all its Memorial Day orders have now been processed and shipped to customers.

The three store employees also said they are also seeing more complaints from customers about the quality of the clothing. “It’s practically every day now that a customer is coming in showing us this full set that they bought and they spent $400 on and the color of the top and the bottom doesn’t match. That’s one of our most frequent (complaints),” said one Laguna Beach sales associate, who adds that people also complain that shirts are slanted or the stripes or falling off. “Your clothes from Lululemon would not look like that,” added the Austin sales associate.

“Our sales–retail, wholesale and ecommerce–continue to grow and we have a lifetime guarantee on our products for any manufacturing defects,” said an Aviator Nation spokesperson. “The brand will pay to have the item fixed or replace it. We stand behind the excellent quality of our clothing.”

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Checks & Imbalances: Mar-A-Lago Sought 380 Foreign Workers, Jim Jordan’s Got $100,000

Today we look at Mar-a-Lago’s staffing whilst Donald Trump had access to America’s secrets.

Mar-A-Lago Sought 380 Foreign Workers During Time Trump Had Access To Classified Documents

Mar-a-Lago looked to employ 380 short-term foreign workers from 2017 to 2022, when Trump had access to classified documents, initially as president and ultimately as a former official living at the club.

Trump pleaded not guilty on Tuesday to 37 charges stemming from his retention of government documents, including 102 the FBI allegedly found when they raided Mar-a-Lago in August 2022. According to the indictment, Trump stored classified documents in the ballroom, a bathroom, his bedroom, a storage room and his office. It’s unclear who exactly could get inside those areas, but it would stand to reason that some Mar-a-Lago staff could access them.

Mar-a-Lago relies on foreign nationals to work as servers, cooks and housekeepers. In 2016, the club sought 65 foreign workers. The figure has increased every year since, with the exception of 2020, when the club shut down in the early days of the pandemic and furloughed more than 150 employees. Last winter, Mar-a-Lago sought out 91 foreign workers, according to records filed with the Department of Labor.

The requirements listed on the job orders do not seem particularly strict. For example, the qualifications to be a housekeeper during the 2021 to 2022 season included three months of verifiable housekeeping experience and a drug and background check. The position also required the ability to communicate in English, maintain flexible hours and move 25 pounds. It paid $11.70 an hour.

U.S. Citizen and Immigration Services’ guidelines allow U.S. employers to hire short-term, non-permanent foreign workers if “there are not enough U.S. workers who are able, willing, qualified and available to do the temporary work.” Foreign nationals from 87 countries are eligible to apply for these jobs via the federal government’s H-2B visa program. Businesses must petition the Department of Labor for permission to hire these workers, listing the number of vacancies they are looking to fill.

If Mar-a-Lago’s reliance on foreign workers seems at odds with Trump’s immigration policy, it’s not. While his White House tried to prevent employers from relying on foreign workers, it targeted permanent employees—not the temporary ones Mar-a-Lago and other Trump properties hire.

Representatives of the Trump Organization did not respond to requests for comment.

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Loose Change

Rep. Jim Jordan (R-Ohio) earned more than $100,000 in 2022 for his memoir, “Do What You Said You Would Do,” according to a disclosure he filed Wednesday with the House clerk’s office. The payment was first reported by

The National Republican Congressional Committee (NRCC) offers signed copies of Jordan’s book in exchange for a donation of $35 or more. The NRCC reported paying $30,000 in 2022 to Jordan’s publisher, Post Hill Press, a conservative outlet.

“Jordan for Congress did not buy copies of ‘Do What You Said You Would Do,’ but certainly understands why other entities might want to use it as a fundraising tool,” said Kevin Eichinger, a spokesperson for the campaign.

Representatives of the NRCC did not respond to inquiries.


The Michigan Republican Party failed to report $2 million in expenditures and $160,000 in receipts in its original March 2023 report, according to a letter the Federal Election Committee (FEC) sent the state party earlier in June. The Michigan GOP has until July 6 to explain its original oversight. A spokesperson for the committee did not respond to a request for comment.

In response to previous inquiries from the FEC about discrepancies between other original and amended filings, the committee said “any change in activity is a result of an audit conducted by the previous compliance staff” and that the committee is using a new compliance firm.

Did TikTok’s CEO Commit Perjury?

Alexandra Levine, a senior writer at Forbes, joins “Forbes Newsroom” to give updates on the rift between the U.S. government and TikTok.

Continuing Irresolutions

Updates on Checks & Imbalances’ previous reporting

Former Vice President Mike Pence announced Thursday that his second book will be published in November.

Pence’s political action committee bought $91,000 worth of his literary debut last year. It peaked at No. 2 on the New York Times’ best-seller list and remained ranked for six weeks.


Kari Lake’s debut single, “81 Million Votes, My Ass,” held the top spot on the iTunes Music chart for two days this week. That list measures paid downloads, as opposed to streams, the more popular method to listen to music.

Tracking Trump

Forbes continues to update “Tracking Trump: All The Criminal Cases, Lawsuits And Investigations Involving The Former President.”


“Hours after becoming the first former U.S. president to be charged with a federal crime Tuesday, Donald Trump laid out his defense against the 37-count indictment accusing him of mishandling sensitive government information and obstructing the investigation into his conduct—but his speech included legally fraught arguments and misleading comparisons of his political adversaries’ own legal woes,” reports Sara Dorn.


Trump’s campaign said it raised $6.6 million after news broke of his federal indictment. At least one fundraiser that contributed to that total was held at his Bedminster, N.J. golf course this week, meaning he may have raised some funds for his private business.

Across Forbes


Which of the following is not a false or misleading remark Donald Trump made after his latest indictment?

A. President Joe Biden had him arrested on “fake and fabricated charges”

B. The Bill Clinton “sock drawer” case exonerates Trump

C. The only person with the power to arrest him in the case is the Palm Beach County sheriff

D. The Espionage Act doesn’t apply

Check if you got it right here.

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Payroll Billionaire Tom Golisano Bets On Employee Retention Startup HelloTeam

The billionaire led a $10 million investment in the Boston-based employee performance startup.

While building payroll company Paychex into a multi-billion dollar company over half a century, Tom Golisano became steeped in the challenge of hiring and holding onto the best workers. So Golisano, worth $5 billion by Forbes estimates, took a particular interest in a Boston-based employee retention startup called Hello Team–so much so that in October of 2022 he supplied $7 million out of a $10 million Series A funding round, Forbes is the first to report.

“Employees want good communication from their management about the issues going on at that company,” Golisano told Forbes. “My experience has been [that] employees complain the most about employers who don’t communicate with them. I think the product, the timing of the product, particularly with the remote environment today, I think was excellent.” Golisano, 81, founded Paychex in 1971 with $3,000 and a credit card and took it public in 1983; today it sports a $39 billion market capitalization.

HelloTeam, an employee and performance management software company, was founded in 2016 by Tanya Bakalov, a Bulgarian immigrant and former consultant at Deloitte. In 2005, Bakalov cofounded SevOne, a network performance monitoring company, which was acquired for an undisclosed amount by software firm Turbonomic in 2019. Two years later, IBM acquired Turbonomic along with the SevOne product line.

Bakalov traces HelloTeam’s origins to SevOne, saying that as she kept hiring employees, she found herself doing “everything and anything” it took to retain them. She started using different tools to measure employee performance and satisfaction with the company, but a disorganized system made for faulty results. She then focused on building a centralized software system to address her concerns.

“I quickly realized that in order to build a great company, it takes a great team,” she says.

Bakalov, who says that the cost of not retaining an employee can be upwards of two times that individual’s salary, wondered about the efficacy of communication between management and employees. She says she aimed for transparency, recognition and continuous feedback when designing her new product.

“HelloTeam takes performance management and employee engagement and puts it into one platform that is focused on everything a company needs to do to keep that employee happy and productive, and ultimately staying within that organization,” she says.

The platform, designed to enhance communication and company culture, allows employees to access their coworker’s profiles – letting them know how much time their peers have been working at the company, who’s on their team and what skills they have. She emphasizes how employees can get recognized for their accomplishments in a public forum, which she describes as being “rewarded from a social perspective and not just monetarily.”

Some of the startup’s clients include the Netflix show The Home Edit, artificial intelligence company Precision AI and hospitality industry B2B payments and business intelligence provider Onyx CenterSource.

“Since implementing HelloTeam’s employee retention platform, we have seen a significant reduction in turnover, saving us north of $4 million per year,” says Becky Ospina, Senior Vice President of Human Resources at Onyx CenterSource. The company fully implemented HelloTeam in 2022, lowering its turnover rate by one-third, it said.

Bakalov first met Golisano through another startup founder, Enrico Palmerio. Palmerio is the founder and CEO of Botkeeper, an automated bookkeeping company that raised $42 million in a Series C funding round led by Golisano in 2021. Palmerio referred Golisano to Bakalov and a week after a three-hour pitch session in Rochester, New York, Bakalov got a call from Golisano’s investment firm, Grand Oaks Capital, saying they were interested in working with HelloTeam.

“Tom is the pioneer, I would say, and a true legend in the human resources space,” Bakalov says, adding that “prior to Paychex, payroll was very much decentralized, broken, similar to how we view engagement and performance management today, and in both cases, the industry was ripe for disruption.”

Bakalov says HelloTeam, which had revenue in the single digit millions last year, is looking into artificial intelligence for its next move. The 37-employee company plans on using the $10 million in funding it has raised to expand AI around retention, taking insights from the engagement of employees and their performance. Bakalov expects the program to roll out in the next year or so.

Golisano stepped down as CEO of Paychex in 2004 but has remained a board member. In addition to backing HelloTeam, he has invested in around 20 companies during the past five years, including the inventory financing platform Kickfurther and first-responders software platform 3AM Innovations.

He has also come up with an idea for a year-round school that will launch in September. The billionaire will fund a college with no summer vacations, with the goal of cutting curriculum time from four years to two. He says the Golisano Institute for Business & Entrepreneurship, which he is endowing with an undisclosed amount, will be located in Rochester, New York. It will have tuition of $8,900 a year–which is higher than in-state tuition for public universities like State University of New York, Purchase or San Diego State University, but far lower than places like Washington University in St. Louis (nearly $30,000) or Southern Methodist University in Dallas (nearly $62,000 in tuition and fees).

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Combined Wealth Of Taiwan’s 50 Richest On Forbes List Dips Slightly To US$155 Billion

Brothers Daniel and Richard Tsai reclaim the No. 1 spot after five years

SINGAPORE (April 20, 2023) – The combined wealth of tycoons on the 2023 Forbes list of Taiwan’s 50 Richest fell only slightly to US$155 billion from $158 billion last year, despite a stock market decline. The complete list is available here and in the April/May issue of Forbes Asia.

After a 6.3% jump in 2021, Taiwan’s economy grew at a modest 2.5% in 2022 as exports slowed amid a global demand slump and rising geopolitical tensions. The benchmark Taiex index declined 9% since fortunes were last measured. The net worths of 22 listees fell this year, leading to a reshuffle in the pecking order at the top.

Brothers Daniel and Richard Tsai rose two spots to reclaim the No. 1 position after a five-year gap, despite an 8% drop in their wealth to $8.8 billion. Shares in their Fubon Financial Holdings took a hit as insurance claim payments for Covid 19-related policies dragged down earnings.

Siblings Wei Ing-Chou, Ying-Chiao, Yin-Chun and Yin-Heng, who control a food and beverage empire under privately-held Ting Hsin International Group, moved up to No. 2 with $8.3 billion. The group’s listed Tingyi, also known as Master Kong, is one of the largest instant noodle makers in mainland China. The brothers are also mulling an IPO of their fast-food chain Dicos, which opened its first Hong Kong store in January.

Rising chemical prices boosted the net worth of Lin Shu-hong, cofounder of petrochemicals conglomerate Chang Chun Group, to $7.9 billion, propelling him to third place on the list. Insurance payouts impacted the fortune of another pair of finance magnates, brothers Tsai Hong-tu and Cheng-ta of Cathay Financial Holdings, who fell from No. 2 to No. 4 and are now worth $7.7 billion.

Footwear magnate Zhang Congyuan, who was last year’s richest, slipped to No. 5 this year as his wealth contracted the most in dollar terms, by $4.5 billion to $7.6 billion. Shares of his Zhongshan, Guangdong-based Huali Industrial Group fell amid decreasing orders from existing clients following pandemic-induced disruptions.

At No. 6 is Terry Gou, who retains his position as his net worth rose to $7.4 billion from $6.8 billion in 2022. Gou gets the bulk of his wealth from Hon Hai Precision Industry (better known as Foxconn), which achieved an 11% rise in revenue to $217 billion. In April, Gou announced his run in Taiwan’s 2024 presidential election after withdrawing from the 2020 contest.

Brothers Chang Kuo-Hua, Kuo-Ming and Kuo-Cheng (No. 14), who inherited the Evergreen Marine shipping empire from their late father, Chang Yung Fa, saw their wealth plunge 40% to $3.2 billion, as Evergreen shares plummeted due to falling freight rates. Growing demand from sectors such as artificial intelligence and automobiles boosted the net worth of Wu Li-gann (No. 35), founder of mainland China-based printed circuit board maker WUS, by 78% to $1.65 billion, making him one of the biggest gainers in percentage terms.

Notable among the four newcomers on this year’s list is Samuel Chen (No. 22), an early investor in Zoom, who debuts with $2.4 billion. Wang Shih-Chung (No. 43), also joins the ranks with $1.3 billion as his AirTAC International Group, a maker of pneumatic equipment, reported stellar sales last year despite market headwinds. Other new additions to the list include the Ma family (No. 15, $3.15 billion), the heirs of Rudy Ma, the founder of Yuanta Financial holdings, who died last October and the Chiao family (No. 17, $3 billion) of wires and cables manufacturer Walsin Lihwa.

One of the two returnees this year is Steven Pan, chairman of Silks Hotel Group, Taiwan’s largest listed hotel operator, who appears at No. 50 with $1.05 billion. The company’s shares surged as the hotel sector recovered from pandemic woes.

The minimum amount required to make this year’s list is $1.05 billion, up from $765 million last year.

The top 10 richest in Taiwan are:

  1. Daniel & Richard Tsai; US$8.8 billion
  2. Wei Ing-Chou, Ying-Chiao, Yin-Chun & Yin-Heng; $8.3 billion
  3. Lin Shu-hong; $7.9 billion
  4. Tsai Hong-tu & Cheng-ta; $7.7 billion
  5. Zhang Congyuan; $7.6 billion
  6. Terry Gou; $7.4 billion
  7. Jason & Richard Chang; $6.3 billion
  8. Tsai Eng-meng; $6.1 billion
  9. Barry Lam; $5.6 billion
  10. Pierre Chen; $5.5 billion

The list was compiled using information from individuals, analysts, government agencies, stock exchanges, databases and other sources. Net worths were based on stock prices and exchange rates as of the close of markets on April 7 and real-time net worths on may reflect different valuations. Private companies were valued by using financial ratios and other comparisons with similar companies that are publicly traded. The estimated net worths may differ from those on the World’s Billionaires List, which includes individual fortunes with net worths as of March 10. The list can also include foreign citizens with business, residential or other ties to Taiwan, or citizens who don’t reside in Taiwan but have significant business or other ties.

For more information, visit

About Forbes

Forbes champions success by celebrating those who have made it, and those who aspire to make it. Forbes convenes and curates the most influential leaders and entrepreneurs who are driving change, transforming business and making a significant impact on the world. The Forbes brand today reaches more than 140 million people worldwide through its trusted journalism, signature LIVE and Forbes Virtual events, custom marketing programs and 48 licensed local editions in 82 countries. Forbes Media’s brand extensions include real estate, education and financial services license agreements.

For media queries, please contact:

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Catherine Ong, cell: +65 9697 0007, Email: [email protected]

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Adani Enterprises’ Failed Share Offering Exposes More Investment Funds With Questionable Ties To The Adani Group

Three investment funds that purchased shares in Adani Enterprises’ scuttled $2.5 billion offering have ties to the Adani Group and suspected Adani proxies, according to a Forbes analysis

Three investment funds with ties to the Adani Group committed to buying up shares as investors in Adani Enterprises follow-on stock offering, which was abruptly canceled Wednesday following a drop in Adani Enterprises’ share price in the wake of U.S. short seller Hindenburg Research’s 100-page report.

Two Mauritius-based funds, Ayushmat Ltd and Elm Park Fund, and India-based Aviator Global Investment Fund, together agreed to buy 9.24% of all shares available to anchor investors, the institutional investors who are allotted shares a day before the public offering. That percentage represented an investment of just $66 million, but is likely more evidence of Adani getting help from affiliated parties.

The three funds’ ties to Adani have not previously been reported, and follow Forbes’ report Wednesday that two of Adani Enterprises’ book-runners, Elara Capital and Monarch Networth Capital, were alleged to be Adani affiliates by Hindenburg.

The Adani Group’s seven publicly listed companies have lost over $100 billion of market value in the ten days since Hindenburg accused it of a decades-long scheme of fraudulent self enrichment. The group issued a lengthy denial and reply to Hindenburg’s report and has threatened legal action against the investment firm. The Adani Group did not respond to Forbes’ request for comment for this article.

Demand for Adani Enterprises’ $2.5 billion stock offering slumped after the short seller’s report. Despite Abu Dhabi’s last-minute injection of $400 million, the Adani Group called off the sale and said it will return funds to investors, with Gautam Adani himself citing in a video the “volatility of the market” and adding that it would not have been “morally correct” to go ahead under the circumstances. (He did not address the Hindenburg allegations.) Adani Enterprises stock has fallen more than 50% since January 24, the day before the Hindenburg report was published.

One of Adani Enterprises’ would-be anchor investors was Ayushmat Ltd, a Mauritius-based fund that had pledged to buy 2.32% of the shares offered early to the institutional investors. Ayushmat is administered by Rogers Capital, a financial services firm in Mauritius. One of Rogers’ directors and key shareholders is Jayechund Jingree, who was formerly a director of the Mauritius-headquartered Adani Global Ltd., a subsidiary of Adani Enterprises.

Jingree also has ties to Vinod Adani, Gautam’s brother and a key player in the Adani Group’s web of offshore companies. As described by Hindenburg, Jingree’s longtime U.K. brokerage, Orbit Investment Securities, was formerly named Jermyn Capital and controlled by Dharmesh Doshi, a former Indian fugitive in connection to a stock rigging scam in 2001, for which his partner, Ketan Parekh, was convicted. Doshi and Jermyn Capital were alleged to have participated in another stock rigging scam involving Indian drugmaker Sun Pharmaceuticals between 2007 and 2009 (Sun’s founder, Dilip Shanghvi, is one of India’s richest, worth $16 billion). That scheme also allegedly involved Jineshwar Holdings, a Mauritius company later revealed by offshore data leaks to be controlled by Vinod Adani.

Vikram Rege, a director at Ayushmat Ltd., said in an emailed statement to Forbes, “Ayushmat Ltd. does not manage any funds on behalf of any Adani Group principals.” Jingree did not respond to a request for comment.

Rege is also a director at Elm Park Fund, which had planned to be the second largest investor (5.67%) in Adani Enterprises’ anchor offering. Elm Park Fund, a Mauritius-based fund, was also alleged to have engaged in the Sun Pharma stock rigging scheme, according to a whistleblower complaint obtained by Moneylife India in 2018. Elm Park Fund was one of a “host of foreign entities involved in questionable transactions in the Indian equity market” as part of the scheme, according to Moneylife India. Forbes could not locate the full complaint; the Securities and Exchange Board of India previously declined to share it.

Rege did not address Forbes’ questions about Elm Park Fund, and the fund did not respond to Forbes’ requests for comment as of press time.

Lastly, Aviator Global Investment Fund subscribed to 1.25% of Adani Enterprises’ anchor shares. The Aviator Global Investment Fund’s senior management official, per 2021 Indian parliamentary records, is Antonino Sardegno. According to Sardegno’s LinkedIn profile (which disappeared within hours after Forbes reached out to him for comment), he led “investment solutions” from 2008 to 2013 for Monterosa Group. In its report, Hindenburg alleged that Monterosa Group and five of its investment funds, holding $4.5 billion of Adani company stock (as of January 24), was Adani’s largest “stock parking entity,” meaning, a third-party fund designed to conceal ownership.

More recently, Sardegno was CEO of Andetta Private Services from 2013 until August 2022. Andetta, which Hindenburg identified as a subsidiary of offshore firm Amicorp, is the controlling shareholder of New Leaina Investments, a Cyprus fund that previously owned over 1% of Adani Green Energy, Adani’s renewable energy company, and smaller stakes in other Adani companies, according to Hindenburg’s research and the Adani Group’s financial disclosures of foreign investors. Hindenburg alleges that Amicorp “formed at least 7 Adani promoter entities, at least 17 offshore shells and entities associated with Vinod Adani, and at least 3 Mauritius-based offshore shareholders of Adani stock.” Sardegno, Andetta Private Services and Amicorp have not responded to Forbes’ requests for comment as of press time.

If Adani Group principals are the ultimate beneficial owners of these various funds, that would mean the Adani Group is also a large stakeholder in one of the Adani Group’s rivals: the Hinduja Group, the $70 billion (annual sales) Indian conglomerate controlled by the four Hinduja brothers. The Aviator Global Investment Fund, New Leaina Investments and three other funds with ties to Adani Group – Elara India Opportunities Fund, Connecor Investment Enterprise Ltd and LGOF Global Opportunities Limited – all hold sizeable stakes in Hinduja Global Solutions, Hinduja Leyland Finance and Hinduja’s Gulf Oil Corp Limited. The Hinduja Group had not responded to a request for comment as of press time.

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Who Is Barry Silbert, The Former Crypto Billionaire That Cameron Winklevoss Is Accusing Of Accounting Fraud?

Digital Currency Group CEO Barry Silbert has been accused of fraud by his ex-business partner turned rival, Cameron Winklevoss. The stunning allegations follow Forbes’ estimates last month that Silbert’s fortune had evaporated, and as government investigations into Silbert’s companies ramp up.

Barry Silbert, the CEO of troubled crypto empire Digital Currency Group (DCG), defrauded some 340,000 crypto investors using Gemini Earn, according to allegations made by Cameron Winklevoss, CEO of crypto exchange Gemini, in a scathing open letter published to Twitter Tuesday morning.

The allegations come nearly two months after Genesis Global Trading, DCG’s wholly owned lending firm, suspended withdrawals for customers in the wake of FTX’s collapse. Gemini had partnered with Genesis for its “Gemini Earn” product, which offered investors annual interest returns of up to 8%.

Silbert and his companies “defrauded” Gemini customers by “conspir[ing] to make false statements and misrepresentations about the solvency and financial health of Genesis,” alleges Winklevoss. “By lying, they hoped to buy time to dig themselves out of the hole they created.”

In response, a DCG spokesperson said in an emailed statement to Forbes: “This is another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers. We are preserving all legal remedies in response to these malicious, false, and defamatory attacks. DCG will continue to engage in productive dialogue with Genesis and its creditors with the goal of arriving at a solution that works for all parties.”

The US Attorney’s Office for the Eastern District of New York is investigating transactions within the DCG empire and the SEC has also opened an investigation, Bloomberg reported last week. Silbert and his companies have not been charged with any crime. DCG has “no knowledge of or reason to believe that there is any Eastern District of New York investigation,” a spokesperson said. Last month, Forbes wrote down the value of Silbert’s stake in DCG from $3.2 billion to $0. “Forbes estimates the value of DCG’s outstanding liabilities are greater than the fair market value of its assets in the current market environment,” we wrote at the time.

The last few months have been a stunning fall from grace for Silbert, a longtime crypto evangelist who says he first invested in Bitcoin in 2012. Prior to his involvement in digital assets, Silbert was an investment banker and financial entrepreneur. He graduated from the Goizueta Business School of Emory University in 1998, followed by a six-year stint at investment bank Houlihan Lokey, where he specialized in financial restructurings. There, Silbert worked on some of the most prominent bankruptcies of the Dot-Com collapse, including Enron and WorldCom.

In 2004, Silbert founded Restricted Stock Partners, a secondary trading platform for employees of companies with restricted stock in public companies. “It’s the largest asset class without a developed secondary market,” Silbert told the New York Times in a 2005 profile. “It’s not a new or novel concept but the time is right because of the proliferation of hedge funds.”

Silbert rebranded his company to SecondMarket in 2008 as he expanded the trading platform to include private company stock and alternative investments, after an early Facebook employee approached Silbert’s company to ask if they could help him sell his shares. By 2011, SecondMarket had facilitated billions of dollars in private market transactions and had over 75,000 registered users.

As SecondMarket grew, so did Silbert’s reputation as a financial entrepreneur. In 2009, he was named one of Ernst & Young’s Entrepreneurs of the Year, and as Crain’s’ Entrepreneur of the Year. Michael Bloomberg, then mayor of New York City, invited Silbert to join his Council on Technology and Innovation. Silbert was named to Fortune’s “40 Under 40” list. He provided testimony to the U.S. Senate on financial regulations.

One former SecondMarket employee remembered Silbert as “very much a by-the-book kind of guy.” Dealing in unregistered securities, Silbert was “focused on making sure we were in good standing” with regulators.

A second early former employee, who worked at the company for several years, described SecondMarket as “a master class in the Silicon Valley trait of hyping a company prior to actually building it.” SecondMarket representatives were “pitching it as an online marketplace of illiquid assets,” but the company “never moved passed a highly manual process requiring humans to executive every aspect,” says the ex-employee.

As for Silbert’s management style: “Barry as a person was cold and wouldn’t even make eye contact with anyone but the few senior people he interacted with,” the former SecondMarket employee says. “He delegated morale building to others and rarely spoke to people even when it was 20 people in the office.”

Nasdaq bought SecondMarket in 2015 for an undisclosed amount. That same year, Silbert launched Digital Currency Group and styled it as an old-school holding company, but built for the Web3 age. DCG founded and acquired assets including news site CoinDesk, bitcoin public trust Grayscale, bitcoin mining company Foundry, and approximately 200 other digital asset investments and tokens.

“Being part of DCG has been great in the sense that Silbert lets us think long term, in terms of decades, and is not really worried about month to month, quarter to quarter results,” Mike Colyer, CEO and founder of bitcoin miner Foundry, told Forbes last month.

The value of DCG’s portfolio ballooned amid crypto’s bull market run during the pandemic. In November 2021, some Digital Currency Group investors sold around $700 million of their shares at a $10 billion valuation.

“We’re the best proxy for investing in this industry,” Silbert boasted to CNBC at the time. Silbert also compared himself to 19th century oil tycoon John D. Rockefeller. “The model I use as an inspiration is Standard Oil,” he told the Wall Street Journal, comparing DCG’s crypto portfolio to Rockefeller’s oil conglomerate.

Grayscale, an investment trust that holds Bitcoin on behalf of investors, quickly became DCG’s most valuable asset, as institutions and high-net-worth investors clamored for a way to gain exposure to Bitcoin. The publicly traded shares of Grayscale’s Bitcoin Trust (GBTC) offered investors access to Bitcoin’s upside–but without having to actually buy and store the digital currency, which many were prohibited from doing. In turn, Grayscale charged a flat 2% fee, higher than other ETFs and closed-end funds, and restricted investors from making immediate redemptions for the underlying asset. At its peak, GBTC’s underlying Bitcoin assets were worth over $43 billion. Grayscale offers similarly structured products for other crypto assets, including Ethereum.

“In the early days everybody kind of celebrated it,” recalls Mike Belshe, CEO of crypto custodian BitGo. “I think a lot of people were a little bit jealous of Grayscale for having such a lucrative product. It is a bit of a cash cow.” Indeed, Grayscale’s GBTC product generated $471 million of revenue in 2021.

As Grayscale caught on with investors, a so-called “GBTC premium” emerged, in which the price of GBTC shares were trading for a higher price than the underlying Bitcoin held by Grayscale. That presented an arbitrage opportunity for hedge fund investors, including the ambitious Three Arrows Capital. Genesis, DCG’s lending unit, began lending money to Three Arrows, which it plowed back into GBTC shares, thus continuing to prop up the GBTC premium.

This trade between Genesis and Three Arrows Capital “ballooned the AUM of the Grayscale Bitcoin Trust and, as a consequence, the fees earned by its sponsor, Grayscale Investments,” according to Cameorn Winklevoss, who alleges that Three Arrows Capital, “was acting as a mere conduit for Genesis, allowing it to enter into what were effectively swap transactions of bitcoin for GBTC shares with the Grayscale Trust.”

In 2021, the GBTC premium turned into a GBTC discount (wherein GBTC shares began trading for less than the underlying Bitcoin). Yet, Genesis continued to lend to Three Arrows Capital. “This had the desired effect of keeping GBTC shares from being sold into the market,” Winklevoss notes, “but for Genesis, this had the undesired effect of keeping its risk position open and allowing it to grow.”

Meanwhile, the parent company Digital Currency Group began borrowing money from Genesis, its own lending firm, which it plowed back into GBTC, the publicly traded trust of its own subsidiary Grayscale. DCG bought nearly $800 million worth of GBTC shares after the GBTC premium became a discount.

“DCG was making a hedge fund-like trade, buying their own product on leverage,” says Ram Ahluwalia, CEO of crypto investment advisor Lumida Wealth.

When Three Arrows Capital blew up in June 2022, Genesis was left with a roughly $1.2 billion hole on its balance sheet, which it then moved to the books of its parent company, Digital Currency Group, in the form of a promissory note due over 10 years.

“They had a solvency issue at Genesis, which they transformed into a liquidity issue,” says Ahluwalia. “But those losses don’t disappear.”

For another five months after Three Arrows’ collapse, Gemini, the Winklevoss’ exchange, continued to rely on Genesis for its Earn Program, and users could continue to redeem their crypto. But the blowup of FTX tipped the scales, causing Genesis to pause all redemptions.

Following FTX’s collapse, Genesis was reportedly seeking a $1 billion cash infusion, but there were no takers as investors ran for the hills. A few days ago, DCG wound down its HQ wealth management business, and Genesis laid off 30% of its staff.

This story was updated to provide comment from DCG on Bloomberg’s report about a New York investigation.

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