Retail traders and investors are not the only ones suffering in America’s war on cryptocurrency. Company executives also see their fortunes diminished by the latest enforcement action.
This week, the Securities and Exchange Commission (SEC) sued both Binance and Coinbase, dousing the flames of optimism about the cryptocurrency industry in 2023 after the cycle bottom following the FTX crash.
This move wiped out more than $50 billion from the crypto markets in a matter of hours on June 6th, as I reported Potato encryption. , but the asset class bounced back fairly quickly. The same cannot be said of the wealth of some individuals.
Crypto billionaires are losing billions
According to Bloomberg Billionaire indexBinance CEO Changpeng Zhao has seen his fortune shrink by $1.4 billion over the past two days. According to the index, his fortune is now about $26 billion.
Binance also saw a rush in withdrawals, but they were limited to around 10,000 BTC, which is just 1.5% of its total reserves, according to Glassnode. The situation for Binance.US could be even worse, after filing with the Securities and Exchange Commission (SEC) to freeze its assets.
Moreover, Coinbase CEO Brian Armstrong’s net worth decreased by $361 million to $2.2 billion, according to the Billionaires Index.
On June 6, the Securities and Exchange Commission (SEC) sued Coinbase for acting as an unlicensed securities broker alleging that a set of crypto assets it filed were securities.
Bloomberg reported that after a massive slump in the fortunes of crypto founders in 2022, there has been a rebound this year with a combined increase of $15.4 billion in 2023.
CZ’s net worth increased by 117% and Armstrong’s by 61% on the back of increased cryptocurrency prices and trading activity. Other crypto billionaires on the Bloomberg Wealth Index are up 9%.
That was it until this week when the SEC caused cryptocurrency and stock prices to crash with an avalanche of litigation against the industry.
protect US banks
The US banking crisis rattled the industry, and regulators were quick to respond to prevent another financial crisis similar to that of 2008 (caused by US banks).
This may be what is driving their war on cryptocurrency. Decentralized digital assets pose a threat to the banking industry, which is largely profitable by lending and investing other people’s money.
SEC Chairman Gary Gensler actually said that America does not need cryptocurrency because it owns the dollar.
“We don’t need more digital currencies (…) We already have a digital currency, called the US dollar,” Gensler said in an interview with CNBC on June 6. He added that the public needs more than one way to move value, which largely explains why he is so keen to attack cryptocurrencies.
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