Page 66 - Forbes - USA (February 2018)

F I N T E C H
CR YPT O BILLIONAIRES

He is hardly alone in becoming in-
sanely and instantly rich from cryp-
to. Chris Larsen, a longtime tech exec
known for cofounding a string of fi n-
tech apps, saw his net worth fl irt with
$20 billion at the height of cryptomania
in early January, based on his ownership
of 5.2 billion XRP, the tokens of Rip-
ple, the company he founded. XRP has
since crashed 65%, but Larsen still tops
Forbes’ first crypto rich list, our (nec-

essarily inexact) accounting of the 20
wealthiest people in crypto.
There are now nearly 1,500 crypto-

assets in existence, valued at an aggre-
gate of $550 billion, up 31 times since
the beginning of 2017. While the pric-
es of individual cryptocoins continue to
swing wildly—Bitcoin is down almost
50% from its peak—it’s clear that block-
chain-based currency is here to stay and
that these virtual assets have real, albe-
it volatile and speculative, value. Black-
market transactions, tax avoidance by
individuals and sanctions-dodging by
countries like North Korea fuel part of
the demand, but so does a widespread
excitement over the technology and an
ideological desire for money to be free
from the whimsies of nation-states.

The winners of this digital lottery dif-
fer from those in previous manias. Th e
shadowy beginnings, at once anarchis-
tic, utopian and libertarian, drew an odd
lot of pioneers who ranged from anties- BROCK PIERCE
tablishment cypherpunks and electrici-
ty-guzzling “miners” to prescient Silicon
Valley financiers and a larger-than-usual assortment of the just tered in cold storage around the country in other people’s

plain lucky “hodlers” (the typo-inspired crypto jargon for “buy names. But the incident underscores the weirdness that sepa-
and hold” investors). As in any gold rush, selling the pans and rates cryptomania from bubbles past.
pickaxes—in this case running exchanges—is proving a more Identifying the biggest crypto winners and estimating the
reliable path to riches than speculation. And, of course, easy scale of their wealth is no simple task. The virtual currencies

money—especially if it’s viewed as a bearer asset—attracts scam exist almost entirely outside the global financial system, and the

artists and thieves. newly minted crypto rich live in a strange milieu that blends
Banking heir Matthew Mellon, whose $2 million investment paranoid secrecy with ostentatious display. Take CZ’s Binance
in XRP blossomed into some $1 billion, learned that fi rsthand exchange. It has no real headquarters: Employees are scattered

in January. The morning after a big bash, the 54-year-old re- across several countries, and CZ himself seems to change lo-

cent divorcé says he discovered four people rooting around his cales the way others change clothes. “We dont want to be in one
$150,000-a-month Los Angeles party pad. (He didn’t report it place right now because of regulatory uncertainty,” says CZ. Last

to the police.) The unwanted guests were probably after his XRP we heard, CZ and his trademark black hoodie had just popped

and they stole four laptops and two cellphones. They didn’t get up in Taiwan.
Mellon’s crypto-fortune—anyone with enough assets to make And CZ is downright normal by crypto-billionaire stan- ETHAN PINES FOR FORBES

our list long ago figured out how to secure it. (Sorry, thugs.) In dards. Former child actor Brock Pierce (The Mighty Ducks, First

Mellon’s case, the private keys are divided up and safely scat- Kid) dresses like a cut-rate Johnny Depp in Pirates of the Carib-
64 | FORBES FEBRUARY 28, 2018