SEC lawsuits squeeze net worths of Coinbase and Binance CEOs

The wealth of Coinbase CEO Brian Armstrong and Binance CEO Changpeng Zhao (CZ) have been significantly impacted by recent lawsuits brought against them by the United States securities regulator.

The Bloomberg Billionaires Index and Forbes reported that within 30 hours of the Securities Exchange Commission (SEC) filing lawsuits against Binance on June 5 and then Coinbase on June 6, the net worths of Armstrong and Zhao were reduced by $289 million and $1.33 billion respectively.

Zhao, the wealthiest individual in the cryptocurrency sector and the 54th wealthiest person in the world overall, has seen his net worth decline by 5.1%, bringing it down to $26 billion this week.

Although the net worth of the CEO of Binance has increased by more than 106% in the current year, it is still lower than 73% of its peak worth of $96.9 billion in January 2022.

Forbes ranks Armstrong as the 1,409th wealthiest individual and the SEC’s latest move caused his net worth to decrease 11.8%, amounting to $2.2 billion.

The Coinbase Chief Executive Officer has been able to benefit from the market revival this year, resulting in a 61% rise in net worth during that period.

Despite the recent decline, Zhao and Armstrong have witnessed net worth increases that are far higher than the 9% year-to-date returns for other people on Bloomberg’s rich list.

The SEC has filed a motion for a restraining order against Binance.

The Securities and Exchange Commission (SEC) took legal action against both Binance and Coinbase, asserting that the exchanges had violated multiple securities regulations, particularly in relation to the purported sale of cryptocurrencies deemed to be unregistered securities by the SEC.

As a result of the lawsuits, the SEC has now categorized 67 cryptocurrencies as securities.

Both Binance and Coinbase have declared that they will “fervently” oppose the lawsuits filed against them.

Does SEC Chair Gary Gensler have the ultimate authority when it comes to crypto regulation?