Binance, Coinbase CEOs' fortunes take hit after SEC crypto lawsuits
Digital assets under fire amid SEC lawsuits against crypto exchanges Binance and Coinbase
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Binance CEO Changpeng Zhao and Coinbase CEO Brian Armstrong watched their fortunes shrink since the Securities and Exchange Commission (SEC) filed lawsuits against the two cryptocurrency exchanges earlier this week.
Zhao’s wealth fell by $1.4 billion to $26 billion over the past two days, while Armstrong’s net worth slipped by $361 million to $2.2 billion, according to the Bloomberg Billionaires Index.
Despite the recent drops in net worth, Zhao and Armstrong’s fortunes have jumped $15.4 billion from Jan. 1, 2023, through Friday, as the value of digital assets regained earlier losses. Over that time, Zhao’s fortune jumped 117% before this week’s decline, while Armstrong’s rose 61%.
SEC SUES COINBASE, SAYS CRYPTO EXCHANGE NEVER REGISTERED AS A BROKER
Binance CEO Changpeng Zhao attends the Viva Technology conference at Porte de Versailles exhibition center in Paris June 16, 2022. | Reuters Photos
CRYPTO EXCHANGE BINANCE, CEO HIT WITH CHARGES IN SEC LAWSUIT
Crypto fallout timeline
The SEC on Tuesday sued Coinbase, accusing it of operating as an unregistered broker. In a complaint filed in Manhattan federal court, the SEC said, since at least 2019, Coinbase pocketed billions of dollars by collecting transaction fees from investors without the disclosures and protections of registration, exposing its customers to risk.
Also on Tuesday, an announcement issued by the New Jersey Office of the Attorney General and the Division of Consumer Affairs said "the Bureau of Securities issued a summary cease and desist order against Coinbase for violations of the Securities Law and corresponding penalties in connection with Coinbase’s crypto staking offerings."
The summary order will assess a $5 million penalty against Coinbase for the sale of unregistered securities, according to New Jersey Attorney General Matthew Platkin.
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On Monday, the regulator accused Binance and Zhao of operating a "web of deception."
Treasury Secretary Janet Yellen said she supports regulatory oversight of cryptocurrency to protect consumers and investors.
Treasury Secretary Janet Yellen during a news conference at the Treasury Department in Washington, D.C., April 11, 2023. (Eric Lee/Bloomberg via Getty Images / Getty Images)
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"I see some holes in the system where additional regulation would be appropriate, and we would like to work with Congress to see additional legislation passed," Yellen said.