Retail traders and investors are not the only ones suffering in America’s war on crypto. Company executives are also seeing their fortunes diminished due to recent enforcement actions.
This week, the SEC sued both Binance and Coinbase, dousing the flames of optimism for the crypto industry in 2023 following the cycle bottom after FTX collapsed.
The move wiped more than $50 billion off crypto markets in a matter of hours on June 6, as reported by CryptoPotato., but the asset class bounced off rather quickly. The same cannot be said about certain individuals’ wealth.
Crypto Billionaires Lose Billions
According to Bloomberg’s Billionaire Index, Binance CEO Changpeng Zhao has seen his wealth shrink by $1.4 billion over the past two days. He is now worth around $26 billion, according to the Index.
Binance also saw a rush on withdrawals, but it was limited to around 10,000 BTC, which is just 1.5% of its total reserves, according to Glassnode. The situation for Binance.US may be worse, however, following a filing by the SEC seeking to freeze its assets.
Furthermore, Coinbase CEO Brian Armstrong’s net worth has declined by $361 million to $2.2 billion, according to the Billionaires Index.
On June 6, the SEC sued Coinbase for operating as an unlicensed securities broker claiming a bunch of crypto assets it offered were securities.
Bloomberg reported that after a massive slump in crypto founders’ fortunes in 2022, there was a rebound this year with a combined increase of $15.4 billion in 2023.
CZ’s net worth had increased 117% and Armstrong’s 61% on the back of increasing crypto prices and trading activity. Other crypto billionaires on Bloomberg’s wealth index were up a combined 9%.
That was all until this week when the SEC caused crypto and stock prices to crash with its torrent of litigation against the industry.
Protecting American Banks
The U.S. banking crisis has rattled the industry, and regulators have been quick to react to prevent another 2008-style financial crisis (which was caused by U.S. banks).
This could be what is driving their war on crypto. Decentralized digital assets are a threat to the banking industry, which largely profits by lending out and investing other people’s money.
SEC Chair Gary Gensler actually said America doesn’t need crypto because it has the greenback.
“We don’t need more digital currency […] we already have a digital currency, it’s called the U.S. dollar,” Gensler said in an interview with CNBC on June 6. “We have not seen, over the centuries, that economies and the public need more than one way to move value,” he added, which pretty much explains why he is so eager to attack crypto.