Among the biggest losers, these billionaires have lost more than 75% of their wealth in the span of 12 months. The situation could get worse as US regulators and prosecutors step in.
It has not been an easy year for cryptocurrency billionaires. Allegations of fraud, lawsuits, government investigations, infighting, and collapsing asset values have all converged on a fragile sector. Together, the billionaire promoters lost $110 billion (€101 billion) over the past year, according to Forbes’ 2023 global billionaires ranking, an annual compilation of ten-figure fortunes.
Last year, Forbes counted 19 crypto billionaires, the highest number ever, who have a combined net worth of $140 billion. Now, those same people have net worths of less than $30 billion, as of March 10, 2023, when Forbes compared net worth to rank them. Ten of them are no longer billionaires.
The biggest crash of the year was the Sam Bankman-Fried accident. Twelve months ago, the cryptocurrency tycoon’s FTX exchange popped out of a $400 million fundraising round valued at $32 billion, giving Sam Bankman-Fried a net worth of $24 billion and making him one of the 50 richest people in the world, according to Forbes estimates.
FTX has since filed for Chapter 11 bankruptcy protection, and Sam Bankman-Fried’s fortune is worth almost nothing. US prosecutors have charged him with multiple counts of fraud and other financial misconduct. (He pleaded not guilty to all charges.) Mr. Bankman Fried’s former colleagues, Caroline Ellison and former billionaire colleague Gary Wang, have become witnesses for the state. His trial is set to begin in October, and he faces life in prison.
In the 12 months through March 2023, cryptocurrencies lost an estimated $700 billion in market cap, dropping to $1 trillion, according to CoinMarketCap. In addition, the valuations of cryptocurrency startups have collapsed due to rising interest rates and investors withdrawing from the technology. The infection of the cryptocurrency market, which began last summer with the explosion of the hedge fund Three Arrows Capital, and culminated in the collapse of FTX in November, led to a massive regulatory campaign in the United States, under the direction of SEC Commissioner Gary Gensler and US attorneys general, which scared investors and spared no one. Cryptocurrency billionaire.
Changpeng Zhao, founder and CEO of cryptocurrency exchange Binance, remains the richest person in the industry, although Forbes now estimates his wealth at $10.5 billion, up from $65 billion a year ago. Last month, the United States. The Commodity Futures and Trading Commission sued Zhao and Binance for allegedly circumventing US compliance tests. (Meanwhile, DOJ prosecutors, working with IRS officials, are considering indicting Zhao and Binance for money laundering and tax evasion, Reuters reported earlier this week. In addition, the Securities and Exchange Commission is conducting (SEC) launched its own investigation into Binance, The Wall Street Journal reported last year. The SEC is also set to sanction cryptocurrency brokerage Paxos for its role in issuing the BUSD stablecoin, an exchange used by Binance traders, according to the report. According to CZ, Binance has not been charged by the Department of Justice or the Securities and Exchange Commission, and Binance has denied the reported allegations.
Brian Armstrong, CEO and co-founder of US cryptocurrency exchange Coinbase, has a net worth of $2.2 billion, up from $6.6 billion last year as shares of his publicly listed company plunged. In January, Coinbase paid a $50 million fine to New York State to settle allegations that Coinbase failed to prevent money laundering on the exchange. Last month, Coinbase revealed that the Securities and Exchange Commission was preparing enforcement action against it. Coinbase insists that it is “confident in the legality of its assets and services.” However, in the course of the crackdown, the US company was reportedly considering launching an exchange platform overseas.
Social network twins Cameron and Tyler Winklevoss are worth $1.2 billion each, up from $4 billion last year, due to growing problems with their Gemini exchange. Last July, the Commodity Futures and Exchange Commission sued Gemini for “materially false or misleading statements” when requesting approval of a Bitcoin futures product. (Cameron Winklevoss called the accusations “nonsense”). Then, in January, the Securities and Exchange Commission (SEC) sued Gemini after its interest-bearing product, Gemini Earn, exploded, freezing 340,000 investors — mostly retail — with $900 worth of funds frozen. Million dollars.
In response to the allegations, the Winklevoss twins blamed Earn’s situation on another cryptocurrency magnate, Barry Silbert, founder of cryptocurrency holding company Digital Currency Group. Genesis Global Capital — which has been sued by the Securities and Exchange Commission — DCG has been tasked with lending cryptocurrency to users. In an open letter, Cameron Winklevoss accused Silbert and DCG employees of accounting fraud, alleging that they “conspired to make false and misleading statements to Gemini and to gain users, other lenders, and the general public about the solvency and financial health of Genesis”. Silbert and DCG have denied the accusations. US prosecutors opened a criminal investigation in January into the transactions between the DCG companies, Bloomberg reported at the time.
Silbert’s fortune, once worth $3.2 billion, is now valued at $400 million, thanks to a stash of bitcoin he said he bought in 2011. Genesis filed for Chapter 11 bankruptcy protection in January. It owes about $3.5 billion to its 20 major creditors, but on February 10, Gemini and other major creditors reached an agreement in principle to partially recover the money.
Here’s how the richest cryptocurrency investors fared over the past 12 months. Net values as at March 10, 2023 were measured and compared to those as at March 11, 2022.
# 1. Changpeng Zhao
net value : $10.5 billion (from $65 billion)
Source of wealth: binance
#2. Good McCaleb
net value : $2.4 billion (from $2.5 billion)
Source of wealth: XRP sales
# 3. Brian Armstrong (tie)
net value : $2.2 billion (from $6.6 billion)
Source of wealth: Coinbase
#3. Chris Larsen (tie)
net value : $2.2 billion (from $4.3 billion)
Source of wealth: ripple
#5. Nikhil Viswanathan and Joseph Lau
net value : $1.8 billion each (from $2.4 billion each)
Source of wealth: Alchemy founders
#7 Cameron and Tyler Winklevoss
net value : $1.2 billion each (just under $4 billion each)
Source of wealth: Bitcoin, Gemini
#9 Matthew Rozak
net value : $1.1 billion (from $1.4 billion)
Source of wealth: Bitcoin, Ether
#10. Song Chi-hyung
net value : $950 million (from $3.7 billion)
Source of wealth: Upbit
No. 11. Farid Arsam
net value : $930 million (from $2.1 billion)
Source of wealth: Coinbase
No. 12. Michael Saylor
net value : $760 million (from $1.6 billion)
Source of wealth: Bitcoin, Micro Strategy Solutions
#13 Tim Draper
net value : $650 million (just under $1.2 billion)
Source of wealth: bitcoin
# 14. Devin Fenzer and Alex Atallah
net value : $600 million ($2.2 billion)
Source of wealth: Founders of OpenSea
# 16. Kim Hyung Neon
net value : $500 million ($1.9 billion)
Source of wealth: Upbit
# 17. Barry Silbert
net value : $320 million (from $3.2 billion)
Source of wealth: Bitcoin, a group of digital currencies
# 18. Sam Bankman Fried
net value : Estimated less than $10 million (from $24 billion)
Previous source of wealth: FTX
# 19. Gary Wang
net value : Estimated at less than $10 million (from $5.9 billion)
Previous source of wealth: FTX
Translated article from the American magazine Forbes – Author: John Hayat
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