Dragonfly Managing Partner Haseeb Qureshi: Zhao Changpeng to be imprisoned in mid-2024, Binance's deposits only decreased by about 2% at that time and quickly recovered
Haseeb Qureshi refuted a simplified narrative: Binance never approached a 90% market share, with lost share mainly going to Bybit and OKX, rather than the then too small Hyperliquid, and the timeline does not match. Hyperliquid's trading volume surged vertically after the airdrop in early 2025; Zhao Changpeng will be imprisoned in mid-2024 and released a few months later. Binance's deposits only decreased by about 2% at the time of his imprisonment and quickly recovered. The peak share was long before the Department of Justice lawsuit, and the decline was a multi-year trend following the FTX collapse, with the lawsuit not significantly changing the slope. The real turning point was the points program and HYPE airdrop.
The public timeline generally aligns with his framework. Zhao Changpeng pleaded guilty and stepped down as CEO in November 2023, was sentenced to four months in Seattle in April 2024, and was released in September of the same year. HYPE will airdrop 31% of its supply to about 94,000 users on November 29, 2024. CoinDesk was commissioned to study that Binance's spot share peaked at about 67% in February 2023 and dropped to about 25.9% by May 2026. The on-chain perpetual volume increase coincided with the incentives from points and airdrops, rather than the start and end of the prison term.
The debate is about causality: did regulatory crackdowns drive contract users from Binance to Hyperliquid? Qureshi framed the transfer as a redistribution among CEXs, while writing DEXs as another product cycle ignited by airdrops. Both can be true: Binance's share has been declining for years, while Hyperliquid's volume increased after incentives, without requiring the former to feed the latter.
Points and airdrops directly convert trading behavior into tokens, with trading volume being a function of mining. The CEX share battle revolves around fees, fiat channels, and product lines. Overlapping the two graphs into a story of "founder imprisonment leading to on-chain rise" omits the decentralized premium following Bybit, OKX, and FTX.
In market mechanisms, what is sold is the right to explain share migration, and what is bought is the position in the next narrative. Demand comes from funds looking for macro reasons to value Hyperliquid, while supply is the verifiable prison term and airdrop date. Beneficiaries are market makers who write product incentives into fundamentals, while those under pressure are traders who write judicial events as traffic switches. Funds do not transfer due to a correction, and perpetual trading still flows according to points and spreads.
Source: Public information
ABAB AI Insight
Crypto Twitter compresses the complex share war into a narrative of hero imprisonment and challenger ascendance. Qureshi dismantles the compression with a calendar: imprisonment occurs six months before the airdrop, and the airdrop is the turning point for trading volume; Binance's competitors are primarily the other two centralized exchanges. As an investor, Dragonfly's correction of the narrative also corrects the valuation anchor: Hyperliquid sells product-market fit after incentives, not the externalities of regulatory fines.
The capital path is points → airdrop → perpetual fees. The 31% supply is sent to real trading addresses, keeping liquidity on its own L1. The loss of Binance's spot share from 67% to 26% mostly remains within the CEX universe. After FTX, users learned two lessons: do not keep funds in custodial services that can collapse, and another CEX may be more convenient. These lessons do not have to point to the same destination.
Similar misreadings include "Apple lawsuits empower Android" and "Microsoft antitrust empowers Google": temporal overlap does not equal causality. The derivatives industry is in a phase where CEX share dilution and on-chain perpetual cycles run parallel. Those who mark the turning point at the airdrop rather than the judgment will price DEXs based on products rather than fines.
Structural judgment belongs to the transfer of pricing power. The pricing power of the market share story shifts from the court calendar to the incentive calendar. The mechanism is: trading follows rewards, deposits follow custodial trust; the two curves can align without being mutually exclusive.
ABAB News · Cognitive Laws
Stories with misaligned timelines are not the cause of share migration
Airdrops pull trading volume, judgments do not necessarily pull trading volume
Lost shares first flow to similar exchanges, then to new ledgers