How to Become a Cryptonaire

Many people made a fortune with cryptocurrency, especially in the bull market of 2021. Successful investments have made many traders and investors millionaires or even billionaires. Crypto is inherently volatile and successful investments involve a certain proneness to tolerate and take risks, expertise, and in-depth knowledge of the market. 

Here is a brief outline of how the richest in crypto succeeded with their projects and what problems they faced afterwards. Prepare to see many numbers!

Crypto bosses’ salaries

We couldn’t control our curiosity and took a glance into the wallets of some of the richest people in the crypto industry. Moreover, this information is not a secret. Let’s see how the crypto founders got wealthy.

Changpeng Zhao

The richest person in crypto, worth $10.2 billion, is Changpeng “CZ” Zhao, the founder and CEO of Binance. Binance is the biggest cryptocurrency exchange by market cap. CZ estimated that Binance had almost 100 million users in 2021. 

He launched it in 2017, when an ICO helped him raise $15 million. Binance handled around 70% of spot trades worldwide in 2022, valued at $5.3 trillion. Most of CZ’s wealth comes from his controlling share in the centralized crypto exchange. Bloomberg estimated Zhao had around $26 billion in 2022, but this was not the full picture. Data on the crypto he holds directly is not publicly available. This includes personal holdings in Bitcoin and BNB. He bought Bitcoin worth more than $1 million when 1 BTC was worth around $600. 

Song Chi-hyung

Song Chi-hyung has a strong link to Upbit, the most prominent South Korean crypto exchange. He founded its parent company, Dunamu. Upbit became the biggest crypto exchange in the country soon after he launched it in 2017. 

In 2021, Upbit’s total returns were $1.73 trillion. Its founder is worth more than $3.6 billion.

Brian Armstrong 

Armstrong is the founder of Coinbase, the biggest crypto exchange in the US. When he was working for Airbnb as a software engineer in 2011, he became aware of issues with money transfers to South America. He started writing code in JavaScript and Ruby to buy and hold crypto. He got an investment of $150,000 when he joined Y Combinator in 2012 and used it to launch his now-famous exchange. 

He met Fred Ehrsam on Reddit and they co-launched Coinbase in 2012, intending for it to enable fans of crypto to trade Bitcoin and altcoins. The value of the exchange was estimated to be just over $8 billion in a 2018 funding round. Coinbase was listed publicly in 2021, following which its market cap soared to $85 billion. According to Forbes, his net worth is $2.7 billion as of June 2023.

Jed McCaleb

Jed McCaleb is a famous name in crypto space. He founded Mt. Gox, the notorious crypto exchange, and managed to sell it right in time. It was hacked the following year and clients of the exchange sustained a collective loss of almost $460 million. 

He went on to launch Stellar (XLM) and Ripple (XRP), two of the biggest cryptocurrencies by market cap. His worth is estimated to be around $2.4 billion based on his holdings of 3.4 billion XRP. The estimate is based on XRP market value in February 2023. McCaleb also founded Vast, an enterprise building artificial gravity, and the Astera Institute, an NPO developing technology to “promote human growth and progress.” 

If you want to learn more about rich people in the crypto sphere, make sure to read our previous article.   

Can you become rich with crypto?

It is possible. But if you want to become rich with cryptocurrencies, then your path will be quite difficult. Building your own crypto projects, finding investments or even doing the usual trading do not guarantee the high profits. Sometimes, it's just sheer luck. 

However, you should know that becoming a rich man in Crypto World requires careful research, understanding of the market, and risk management. Here are a few tips that may help you:

1. Start by educating yourself about cryptocurrencies, blockchain technology, and how they work. Understand the different types of cryptocurrencies and their underlying technologies. You may do that via the SimpleSwap Blog, too. 
2. Stay updated with the latest news and developments in the crypto sector. Research different cryptocurrencies, their potential use cases, market trends, and the teams behind them. Look for projects with strong fundamentals, active communities, and reputable partnerships. 
3. Don't put all your eggs in one basket. Diversify your crypto portfolio by investing in multiple cryptocurrencies across different sectors. This can help mitigate risks associated with volatility and market fluctuations.
4. Set a budget for your crypto investments and only invest what you can afford to lose. Consider using risk management tools like stop-loss orders to protect your investments from significant losses.
5. It's important to have a long-term perspective and not get swayed by short-term price fluctuations. Cryptocurrency markets can be highly volatile in the short term. Focus on the potential of the technology and the project's viability in the future.
6. Ensure you follow best practices for securing your crypto assets. Use reputable cryptocurrency exchanges, enable two-factor authentication, and consider using cold storage wallets to store your cryptocurrencies offline.

Is it worth it? 

Is there really that much to envy the crypto billionaires about? CZ’s exchange has been sued, investigated, and generally scrutinized by authorities all over the world in the past few years. Most recently, it was sued by the US Securities and Exchange Commission. The regulator accused Binance of allowing money laundering and wire fraud, among other allegations, all of which the exchange denies.

The SEC also sued Coinbase on allegations of running an unregistered clearing agency, brokerage, and securities exchange. More details on these cases here. 

Ripple didn’t go unnoticed by the SEC, with the lawsuit between them dragging on for years. Allegedly, Ripple executives sold the ecosystem’s native token as an unregistered security, making substantial profits. Executives Brad Garlinghouse and Chris Larsen are among the defendants in the lawsuit. Their attorney John Deaton has questioned why the financial watchdog excluded Jed McCaleb, who also sold XRP. According to Deaton, Ripple’s cofounder made $2.56 billion from selling the token, which is almost twice what the regulator is seeking from his clients, Larsen and Garlinghouse. He called the charges “insanely inconsistent and illegitimate.”

The final word

So, there are still many cases when large multi-billion-dollar crypto companies and their owners were sued. The founders of such companies and any other rich people often get into trouble because the eyes of the regulators, taxmen and others are always on them. Are you ready to spend a lot of time and money trying to win the case, if something like that happens? You decide. Of course, there’s not a 100% chance that you will face the situations mentioned above. Being careful with your funds when they are worth millions of dollars is an important thing to do.      

All in all, investing in cryptocurrencies is risky, and there is no guarantee of becoming rich. It's essential to approach investments with caution and make informed decisions based on thorough research. Consulting with a financial advisor or an expert in the crypto field may also be beneficial.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.