Binance and Coinbase Crackdown Wipes $1.7 Billion from CZ and Armstrong’s Fortunes

The CEOs have shed a lot of personal wealth, but are still up in 2023.

Coins flying out of Brians Armstrongs pocket
Created by Kornelija Poderskytė from DailyCoin
  • Crypto’s billionaires are personally feeling the pinch.
  • CZ is the biggest loser, with a billion+ down the drain. 
  • Coinbase has lost more than just a fortune for its CEO; investors are also down. 

The sudden back-to-back lawsuits laid by the SEC against Binance and Coinbase have impacted the crypto market, causing huge volatility. However, big chunks of their fortune have been slashed for those at the forefront of the legal battle. 

 According to the Bloomberg Billionaires Index, Binance CEO Changpeng Zhao – CZ – has seen his wealth shed $1.4 billion to sit at a still handsome $26 billion. Meanwhile, Coinbase CEO Brian Armstrong’s net worth was also hit to the tune of $361 million, dropping his worth to $2.2 billion.

Fluctuating Fortunes

Unsurprisingly, the men at the helm of the companies being brought to justice by the SEC are suffering massive financial losses. The crypto market also saw a drop in value as the news broke, but it has rebounded. 

As the news broke, Bitcoin’s value fell sharply to a three-month low. The leading crypto fell to $25,500, its lowest value since March. However, it did manage to spike back up to the same price it was before the SEC’s announcements. 

As for the CEOs and their personal wealth, there has not been the same rebound. However, as of Friday, June 2, both their fortunes were up $15.4 billion in the year. Zhao’s fortune surged 117% before this week’s drop, while Armstrong’s jumped 61% through 2023. By comparison, the other billionaires on Bloomberg’s wealth index were up a combined 9%. 

The reason for these crypto giants’ impressive performance is crypto’s strong market compared to 2022. The combined net worth of CZ and Armstrong plummeted in 2022, during a year of high-profile collapses, ranging from TerraUSD to hedge fund Three Arrows Capital to Sam Bankman-Fried’s FTX.

Coinbase Crumbling

Coinbase, as a publicly listed company, is showing more red numbers beside Armstrong’s fortune. 

Right after the SEC announced the lawsuit, Coinbase shares started plummeting. At one point, COIN was down around 10%. This was a substantial drop for a firm already embroiled with the SEC, as in March, Coinbase received a Wells Notice from the SEC, informing the exchange that the regulatory agency might be taking legal action.

Regardless of the SEC’s actions and its impact on Coinbase and the personal wealth of the CEO, Armstrong is “proud to represent the industry in court.” He explained on Twitter: 

Seeking Clarity

Both Zhao and Armstrong have been critical of the SEC’s approach in the past and recently. Armstrong has called on the U.S. to provide a clear legislative framework, or “rulebook,” to avoid instances of ambiguity leading the SEC to prosecute.

While Zhao has publically lambasted the SEC’s apparent mandate, asking if the SEC protects people more than Binance in a Twitter poll.

On the Flipside

  • The SEC’s double blow of lawsuits saw the crypto market cap fall from $1.198 trillion on June 4 to $1.132 trillion on June 5. However, by June 6, it was back to $1.180 trillion.

Why This Matters

While the personal wealth of these companies’ CEOs does not matter much, the fact that such high-profile crypto companies are under attack is cause for concern. It indicates the U.S.’s current approach to crypto, which is very hostile. 

Read more about Coinbase shares dropping:

Coinbase Shares Dump Following SEC Lawsuit Against Rival Binance

Read more about the allegations of wash trading against CZ:

Binance Sued: Accusations of Wash Trading Pile Pressure on CZ

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Darryn Pollock

Darryn Pollock is a South African-born, UK-based journalist and content writer for DailyCoin with a focus on regulation and legislation revolving around the cryptocurrency space. He has covered the evolving crypto regulatory space, and examined how the US has approached law-making to offer protection in the growth of innovation. Darryn values traditional journalistic principles of truth, accuracy, independence, fairness, and impartiality, and has a Bachelor of Arts degree in Journalism and Law from Rhodes University in South Africa.