Crypto tycoons saw their wealth balloon in 2023 despite scandals

The world’s biggest crypto-billionaires have seen their coffers swell in 2023 after the ‘annus horribilis’ of the previous year.

In 2022, the cryptocurrency sector was hit by a string of scandals that prompted swift crackdowns by regulators.

But many of the most influential players saw their wealth continue to soar in 2023 as the price of digital currencies rebounded strongly. This was despite two of them being brought low by legal entanglements.

Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, saw his net worth expand by £19.5 billion in 2023 to £29 billion.

That puts him just behind British-Ukrainian businessman Len Blavatnik in the Bloomberg Billionaires Index.

In the money: Changpeng Zhao has cashed in from the rising Bitcoin price

The massive expansion in Zhao’s wealth came despite him standing down as head of Binance in November after he pleaded guilty to violating US anti money laundering rules. He is barred from leaving the US before sentencing.

Another crypto bigwig, Brian Armstrong, the founder and head of American crypto exchange Coinbase, saw his net worth grow by £4.9 billion to £6 billion this year.

The only big player to have suffered a sharp decline in their fortune is Sam Bankman-Fried. He is facing up to 120 years in prison after a US court found him guilty of defrauding customers and investors in his crypto exchange FTX.

Bankman-Fried, known by his initials SBF, saw his wealth peak at around £21 billion.

This evaporated after FTX imploded into bankruptcy last year after a surge in withdrawals which the company could not honour. The fallen wunderkind was found to have operated a scheme that funnelled billions into his trading firm Alameda Research. Some of the money was used to fund political campaigns and to purchase luxury homes in the Bahamas.

Forbes now has SBF’s net worth pegged at zero.

Ballooning wealth among the crypto industry’s top figures has followed a sharp rise in the value of Bitcoin and other digital currencies this year.

Bitcoin’s value has surged by 154 per cent over the last 12 months to $42,187. Ethereum, the world’s second most valuable crypto- currency, has leaped by 93 per cent to $2,390.

The rally comes amid growing optimism of a thaw in the so-called ‘crypto winter’ as hopes that central banks will start cutting interest rates next year sent investors piling back into riskier assets.

Others are cautiously eyeing January 10 – when the US financial watchdog, the Securities and Exchange Commission, is due to decide whether to approve a Bitcoin exchange-traded fund. Many think that would attract a larger number of traditional investors.

But Laith Khalaf, head of investment analysis at AJ Bell, warned: ‘It remains the case you shouldn’t bet your shirt unless you’re prepared to lose it.’

This post first appeared on Dailymail.co.uk