Binance and Coinbase CEOs’ wealth slashed by billions
The Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase, two of the largest cryptocurrency exchanges in the world. These lawsuits have caused billions to be slashed from the fortunes of their respective CEOs. According to Bloomberg, Binance CEO Changpeng Zhao had his wealth drop by $1.4 billion to $26 billion over the past two days, while Coinbase boss Brian Armstrong took a $361 million hit to his net worth, which now sits at $2.2 billion. Both CEOs were sued this week for breaking the SEC’s securities rules, including failing to register with the regulatory agency. The SEC sued Binance’s Zhao on Monday, accusing him of operating a “web of deception” and alleging that Binance created separate US entities “as part of an elaborate scheme to evade US federal securities laws.” Binance has defended its platform “vigorously” in a blog post and notes that the SEC’s actions are limited in reach, as the crypto company is “not a US exchange.” The SEC also sued Coinbase for allegedly acting as an unregistered broker, accusing it of trading at least 13 unregistered crypto assets since 2019.
FAQs:
What is Binance?
Binance is one of the largest cryptocurrency exchanges in the world.
What is Coinbase?
Coinbase is the largest cryptocurrency exchange in the US.
What is the SEC?
The Securities and Exchange Commission (SEC) is the regulatory agency charged with protecting investors and maintaining fair and orderly markets in the US.
What are the lawsuits against Binance and Coinbase?
The SEC has filed lawsuits against Binance and Coinbase for breaking the SEC’s securities rules, including failing to register with the regulatory agency.
What are the allegations against Binance and Coinbase?
The SEC alleges that Binance created separate US entities “as part of an elaborate scheme to evade US federal securities laws,” while Coinbase is accused of acting as an unregistered broker and trading at least 13 unregistered crypto assets since 2019.
What has been the impact of the lawsuits?
The lawsuits have caused billions to be slashed from the fortunes of Binance CEO Changpeng Zhao and Coinbase boss Brian Armstrong. They have also caused shares of crypto and blockchain companies to tumble, with Binance’s token Binance Coin (BNB) tumbling more than 5% and Coinbase’s value falling by more than $3 billion.
What is the SEC’s goal in filing these lawsuits?
These lawsuits are part of SEC Chair Gary Gensler’s efforts to assert more oversight over crypto markets, which he has called the “Wild West” of investing.
Billions of dollars slashed from the wealth of Binance and Coinbase’s CEOs.
In a major blow to the world’s largest cryptocurrency exchanges, the Securities and Exchange Commission (SEC) has filed lawsuits against Binance and Coinbase. As a result, billions have been wiped off the fortunes of their respective CEOs, Changpeng Zhao and Brian Armstrong.
According to Bloomberg, Zhao has seen his wealth decline by $1.4 billion to $26 billion over the past two days, while Armstrong’s net worth has dropped by $361 million to $2.2 billion. Both men were accused of breaking the SEC’s securities rules, including failing to register with the regulatory agency.
Binance, in particular, was accused of operating a “web of deception.” The SEC alleged that Zhao secretly controlled customers’ assets and withheld information from regulators. The exchange was also accused of creating separate US entities as part of an elaborate scheme to evade US federal securities laws.
Despite the lawsuits, both Binance and Coinbase have vowed to defend their platforms. Binance noted in a blog post that the SEC’s actions are limited in reach since it is not a US exchange.
The SEC’s lawsuits are part of Chairman Gary Gensler’s efforts to assert more oversight over crypto markets, which he has referred to as the “Wild West” of investing. While crypto billionaires like Zhao and Armstrong saw their wealth skyrocket by $15.4 billion this year through Friday, the SEC’s actions have caused widespread losses in the crypto market. The price of Bitcoin, the largest token by market cap, has declined by about 4%, while Ethereum, the second-largest token by value, has dipped nearly 3%.