Crypto Winter knocks 3 people off Forbes 400 list of richest Americans

by Arthur · September 27, 2022

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Not all blockchain billionaires survive the harsh conditions.

IIt’s been a cold crypto winter for blockchain backers, builders and HODLers (crypto speak for patient investors). This also applies to people at the top.

America’s richest crypto tycoon has lost billions of dollars over the past year as Bitcoin fell from over $50,000 to under $20,000, Coinbase shares plunged more than 75% and the total market cap of all cryptocurrencies halved, from around 2.2 trillion dollars to less than $1 trillion. , according to data from CoinMarketCap.

Last fall, a record seven crypto-billionaires appeared on the Forbes 400 list of the richest people in the United States. This year there are only four left. The quartet is worth a total of 27.3 billion dollars. Last year’s seven were worth $55.1 billion.

Things weren’t supposed to go this way. Crypto asset values and public recognition of crypto reached new heights last year, as Bitcoin peaked at $69,000 in November and capital poured into NFTs and ‘Web3’ projects. 2022 was supposed to be the year of crypto.

Instead, the sector has turned around. The collapse of prominent crypto projects – including stablecoin Terra, hedge fund Three Arrows Capital and lenders Celsius Network and Voyager Digital – has rocked the industry. Fears, fueled by inflation, rising interest rates and a broader sell-off in the market, have dampened investor enthusiasm.

Amidst the meltdown, some US crypto moguls emerged as the industry’s saviors. Others ‘bought the dip.’ And a few have taken up new hobbies.

Here are the four American crypto-billionaires who made this year’s Forbes 400, and those who fell short. (Net worth is as of 2 September 2022.)

SAM BANKMAN-FRIED

^{Net worth: $17.2 billion (down from $22.5 billion)}

^{Forbes 400 ranking: No. 41}

For the richest person in crypto, the downturn has brought opportunity. In June, his FTX exchange lent $400 million to BlockFi, which included an option to buy the embattled crypto lender outright for up to $240 million. (BlockFi was valued at $3 billion before the downturn.) That same month, FTX’s U.S. arm bought Canadian crypto exchange Bitvo, while another of Bankman-Fried’s companies, trading firm Alameda Research, lent about $500 million to Voyager Digital, another crypto exchange who struggle. lender (who later filed for bankruptcy). Anyway: A leaked investor presentation last month revealed that FTX ended 2021 with about $2 billion in cash on hand, and familiar sources say Bankman-Fried is preparing to make more acquisitions.

In addition to becoming crypto’s lender of last resort, Bankman-Fried has kept busy building her profile in Washington. He has lobbied the Commodity Futures Trade Commission to allow FTX to clear derivatives transactions directly without intermediaries. He has also made waves as a political donor, pledging to spend between $100 million and $1 billion during the 2024 election season on candidates who support “sensible governance.”

GARY WANG

^{Net worth: $4.6 billion}

^{Rank: No. 227}

Bankman-Fried’s right-hand man, 29-year-old Gary Wang, founded both Alameda Research and FTX, where he serves as chief technology officer. Although he keeps a lower public profile than Bankman-Fried, he has been no less instrumental in the company’s rapid rise. Wang owns about 16% of FTX, which is based in the Bahamas (where he and Bankman-Fried now live) and about 16% of FTX’s US arm.

Wang is an MIT graduate who previously worked at Google, where he built systems to collect prices on millions of flights.

CHRIS LARSEN

^{Net worth: $2.8 billion (down from $6 billion)}

^{Rank: No. 380}

The co-founder and chairman of crypto-payments firm Ripple’s net worth has plunged, with XRP, Ripple’s original token, down about 75% since last year, and Larsen and Ripple continue to fight claims by the Securities and Exchange Commission that Ripple’s XRP issuance was an unregistered securities offering. .

In January, the company bought back shares from Tetragon Financial Group, which had invested in Ripple’s Series C funding round in 2019, but sued Ripple for its money back after the SEC charges became public.

While Larsen has refrained from public statements about the SEC lawsuit, he has been a vocal advocate for making Bitcoin more environmentally friendly. The 62-year-old regularly tweets and appears on podcasts to discuss the topic, which is hotly contested among Bitcoin diehards.

BRIAN ARMSTRONG

_{Net worth: $2.7 billion (down from $11.5 billion)}

_{Rank: No. 388}

The crypto downturn is hitting his Coinbase hard. One of the largest US crypto exchanges, the company relies on trading to generate fee income – and trading is way down. Quarterly transaction volume at Coinbase was $227 billion last quarter, compared to $547 billion in Q4 2021. In June, Coinbase laid off 18% of its employees. Armstrong warned last month that the crypto winter could last between 12 and 18 months.

Still, Armstrong perseveres. He hasn’t sold a single share of Coinbase — which he listed on the Nasdaq exchange in April 2021 — even though the stock has cratered 76% since last year’s listing. Armstrong has been careful to maintain Coinbase’s goodwill with regulators over the years, but he recently blasted the US Treasury Department’s sanctions against Tornado Cash, an open source software that allows Ether investors to hide their identities. Coinbase is helping to fund a lawsuit against the Treasury, and in a blog post, Armstrong said the agency had “exceeded its authority” in imposing sanctions.

Drop Offs

These crypto moguls are still billionaires, but fell away Forbes 400 rankings this year.

CAMERON AND TYLER WINKLEVOSS

_{Net worth: $2.2 billion each}

_{Last year: $4.3 billion}

Cameron and Tyler Winklevoss, the twin brothers who famously sued Mark Zuckerberg and plowed their settlement money into Bitcoin, are now worth an estimated $2.2 billion apiece as the value of their supposed crypto holdings — mainly Bitcoin, Ether and Filecoin — has plummeted.

Also hurt: Gemini, the twins’ crypto exchange. Trading volume is down an estimated 50% from late 2021, when the company raised $400 million from VCs at a $7.1 billion valuation. On June 2, the same day Gemini laid off 10% of its workforce, the Commodities Futures Trading Commission sued Gemini, alleging the company made “false or misleading statements” about its proposed bitcoin futures product. (The company has denied wrongdoing; Tyler described the claims that “nuts” while Cameron labeled them “nonsense”.)

The Winklevii, seemingly unfazed, spent the summer taking their cover band, Mars Junction, on tour, stopping at small music venues all over the country. Some critics have blasted the stunt (one compared their performances to “rich guys doing bad cruise ship karaoke”). The twins have defended their newfound craft: “When you play covers, you’re judged against the recording,” Tyler explained to New York Times in July. “It’s a tough thing.”

JED McCALEB

_{Net worth: $2.5 billion}

_{Last year: $3 billion}

The longtime blockchain pioneer known for founding Mt. Gox (the first ever Bitcoin exchange) and Ripple co-founder sold the last of his XRP holdings earlier this year, fulfilling the terms of a 2014 separation agreement he entered into with Ripple after falling out with his Larsen and other early executives. McCaleb has earned over $2 billion in estimated after-tax income from XRP sales.

He also has an estimated 1 billion Lumens, the original cryptocurrency of the Stellar blockchain project, which he founded after leaving Ripple. Late last year, McCaleb turned his attention to a new realm: space. He says his new company, Vast, is “building artificial gravity space stations to expand humanity across the entire solar system.”

FRED EHRSAM

^{Net worth: $1.1 billion}

^{Last year: $3.5 billion}

Ehrsam co-founded Coinbase with Brian Armstrong in 2012. He left the company in 2017, but remains a board member, and now heads crypto-focused investment firm Paradigm Capital. The 34-year-old earned about $370 million in estimated after-tax income from selling Coinbase shares last year, before prices plummeted. Then, in May, Ehrsam bought about $77 million in Coinbase shares on behalf of Paradigm, buying the dip.

Ehrsam insists that the crypto downturn is temporary. “One thing most people don’t fully understand: it takes years, often decades, to go from a new technology breakthrough at the infrastructure level (like crypto) to a vibrant ecosystem of mainstream applications,” he tweeted in June.