Crypto Billionaires Lose Big Amid SEC's 2023 Crackdown on Binance and Coinbase
Crypto billionaires have been hit hard by the Securities and Exchange Commission's crackdown on Binance and Coinbase, incurring huge losses so far this week.
Binance CEO Changpeng Zhao, known as CZ, has seen his net worth shrink by $1.4 billion to $26 billion, while Coinbase CEO Brian Armstrong has seen his net worth drop by $361 million to $2.2 billion, according to the Bloomberg Billionaires Index.
This marks a reversal in fortune for crypto’s wealthiest founders, who saw their combined net worth increase by $15.4 billion in 2023 from the comeback in the price of Bitcoin and other digital assets.
Specifically, Zhao's fortune was up by a staggering 117% before this week’s decline, while Armstrong’s was up by 61%.
By comparison, the other billionaires on Bloomberg’s wealth index were up a combined 9%.
Bitcoin's partial comeback this year was largely due to the expectations that the decreasing inflation as well as the US banking crisis that erupted in March would lead the Federal Reserve to hit a pause on rate increases.
That is because lower interest rates can stimulate economic growth and may lead investors to seek higher returns from riskier assets such as cryptocurrencies and stocks.
However, this may not matter if US regulators make it harder for the industry to operate or make it difficult for Americans to trade.
The SEC has sued both Binance, the world's largest cryptocurrency exchange, and Coinbase, the largest US-based cryptocurrency, over the past two days.
The commission filed 13 charges against Binance and its US affiliates, ranging from allegedly operating as an unregistered exchange to offering unregistered securities.
The regulator also levied similar charges against Coinbase, claiming that it operated as an
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