Crypto billionaires' assets plummeted

Binance CEO Changpeng Zhao and Coinbase CEO Brian Armstrong lost a total of nearly $1.8 billion when the two companies were sued by the US Securities and Exchange Commission (SEC).

Until last week, 2023 was still a great year for crypto billionaires. However, two consecutive lawsuits by the US Securities and Exchange Commission (SEC) against cryptocurrency exchanges Binance and Coinbase in the past two days have caused optimism in this market to disappear.

According to the Bloomberg Billionaires Index, the fortune of Binance CEO Changpeng Zhao (CZ) dropped by $1.4 billion in the past two days, to $26 billion. Coinbase CEO Brian Armstrong's fortune also lost $361 million, to $2.2 billion. The SEC accused the two companies of violating securities regulations, causing the shares of crypto-related companies and the price of many tokens to plummet.

Changpeng Zhao (left) and Brian Armstrong. Photo: Bloomberg

This is the next turning point for crypto billionaires. Their total assets plummeted during the "crypto winter" of 2022. Last year saw the collapse of many names, from stablecoin TerraUSD, venture fund Three Arrows Capital to Sam Bankman 's FTX exchange. - Fried.

However, through the end of last week, their assets increased by 15.4 billion USD as the price of Bitcoin and other digital assets recovered. Zhao's fortune is up 117% ahead of this week's drop. Meanwhile, Armstrong's fortune increased 61%. The billionaires on Bloomberg's list only recorded a 9% increase.

Bitcoin price this year increased on the expectation that the banking crisis in the US will force the US Federal Reserve (Fed) to stop raising interest rates. Until now, Bitcoin investors have argued that the digital currency will benefit from the low interest rate environment and provide a safe haven when the traditional financial industry fluctuates.

However, the situation could change as US officials make it difficult for the industry to operate and Americans to trade.

In the lawsuit filed on June 5, the SEC accused Zhao and Binance - the world's largest cryptocurrency exchange - of misleading investors and authorities, misusing user funds and violating securities regulations. Zhao's fortune at one point peaked at $96.9 billion in January 2022.

The SEC on June 6 continued to sue Coinbase, causing the company's stock to drop 12%. In the 101-page report, the SEC did not accuse Armstrong of wrongdoing. However, the agency argued that Coinbase violated SEC regulations by allowing users to trade tokens that are essentially unregistered securities.

Armstrong currently owns 16% of Coinbase, both directly and indirectly through funds. He also regularly sells Coinbase stock and has sold $27 million of shares this year. Coinbase co-founder Fred Ehrsam also recorded a decrease in assets of $1.1 billion.

Ha Thu (according to Bloomberg)

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