Bitcoin, crypto billionaires lost $110 billion in the past year

It’s been a tough year to be a cryptocurrency billionaire. Allegations of fraud, lawsuits and government investigations, internal squabbling and falling asset valuations combined to shatter a fragile industry. The billionaire promoters have lost a total of 110 billion dollars in the past year, according to Forbes’ 2023 World’s Billionaires List, an annual compilation of ten-figure fortunes.

Last year Forbes identified 19 crypto billionaires, the most ever, who were collectively worth $140 billion. Now, those same people are worth less than $30 billion, as of March 10, 2023, the date Forbes measured net values ​​for the list. Ten of them are no longer billionaires.

The biggest crash of the year was Sam Bankman-Fried. 12 months ago, the crypto mogul’s FTX exchange was fresh off a $400 million fundraising that valued it at $32 billion, giving Bankman-Fried a net worth of $24 billion and making him one of the 50th richest people in the world , per Forbes estimates.

Since then, FTX has filed for Chapter 11 bankruptcy protection and Bankman-Fried is worth next to nothing. US attorneys have charged him with multiple counts of fraud and other financial wrongdoing. (He has pleaded not guilty on all counts). Bankman-Fried’s former colleagues, Caroline Ellison and fellow ex-billionaire Gary Wang, have become state witnesses. His trial is set to begin in October and he faces life in prison.

In the 12 months to March 2023, cryptocurrencies shed about $700 billion in market capitalization — falling to $1 trillion — according to CoinMarketCap. On top of that, the valuation of private crypto startups fell due to rising interest rates and investors pulling money from technology. Contagion in the crypto market, which began last summer with the explosion of hedge fund Three Arrows Capital and culminated in FTX’s implosion in November, triggered a sweeping US regulatory crackdown, led by SEC Commissioner Gary Gensler and US prosecutors, that has spooked investors and left crypto behind. billionaire unharmed.

Changpeng Zhao, founder and CEO of the crypto exchange Binance, remains the industry’s richest person, but Forbes now pegs the fortune at $10.5 billion, down from $65 billion a year ago. Last month, the United States. The Commodities and Futures Trading Commission sued Zhao and Binance for allegedly circumventing US compliance controls. (CZ and Binance dismissed the allegations as inaccurate.) Meanwhile, Justice Department prosecutors, working with IRS officials, are considering criminal charges against Zhao and Binance on charges of money laundering and tax evasion, Reuters reported earlier this year. Additionally, the Securities and Exchange Commission is conducting its own investigation into Binance, the The Wall Street Journal reported last year. The SEC is also preparing to sanction crypto firm Paxos for its role in issuing Binance’s BUSD stablecoin, a medium of exchange used by traders on Binance, according to The Wall Street Journal. CZ and Binance have not been charged by the DOJ or SEC, and Binance has denied the reported allegations.

Brian Armstrong, CEO and co-founder of US crypto exchange Coinbase, is worth $2.2 billion – down from $6.6 billion last year, as a result of a drop in the shares of his publicly traded company. In January, Coinbase paid a $50 million fine to the state of New York to settle allegations that Coinbase had failed to prevent money laundering on the exchange. Last month, Coinbase revealed that the Securities and Exchange Commission is preparing an enforcement action against it. Coinbase insists it is “confident in the legality of its assets and services.” Amidst the downturn, however, the American company is reportedly looking at launching a foreign trading platform.

Cameron and Tyler Winklevoss, the twins of The social network fame, are each worth $1.2 billion, down from $4 billion apiece last year, due to mounting problems at their privately held exchange Gemini. Last July, the Commodities and Futures Exchange Commission sued Gemini for “making materially false or misleading statements” when applying for approval of a bitcoin futures product. (Cameron Winklevoss rejected the accusations as “nonsense”. Then, in January, the SEC sued Gemini after its interest-bearing product, Gemini Earn, imploded, leaving 340,000 investors — most of them retail — with $900 million in frozen funds.

In response to the allegations, Winklevii blamed the Earn situation on another crypto tycoon, Barry Silbert, founder of crypto holding company Digital Currency Group. DCG’s lending business, Genesis Global Capital – which was also sued by the SEC – had been responsible for lending Earn users’ crypto. In an open letter, Cameron Winklevoss accused Silbert and DCG employees of accounting fraud, alleging that they “conspired to make false statements and misrepresentations to Gemini, Earn users, other lenders and the general public about the soundness and financial health of Genesis.” Silbert and DCG denied these allegations. US prosecutors in New York’s Eastern District Court opened a criminal case in January of transactions between DCG companies, Bloomberg reported at the time. A spokesperson for DCG says the firm has “no knowledge of or reason to believe that there is any investigation in the Eastern District of New York.” A call from Forbes to EDNY’s press office was not returned.

Silbert, who was previously worth $3.2 billion, is now worth an estimated $400 million, thanks to a stash of bitcoins he has said he bought in 2011. Genesis filed for Chapter 11 bankruptcy in January. It owes its largest 20 creditors about $3.5 billion, but on February 10, Gemini and other major creditors reached an initial agreement to partially recover funds.

Here’s how crypto’s richest investors have fared over the past twelve months. The net worth was measured on 10 March 2023 and 11 March 2022.