Freewheeling bitcoin evangelist Sam Bankman-Fried has dropped from the ranks of the world’s richest people after watching his nearly $16 billion fortune shrink to about $1 billion in a matter of hours as his company FTX imploded.
The 30-year-old crypto tycoon — known as SBF among bitcoin enthusiasts — has lost about 94% of his estimated $15.6 billion net worth since Tuesday, when FTX was forced to seek a bailout from Changpeng Zhao’s rival platform Binance due to a crippling liquidity crunch.
After the collapse, Bankman-Fried’s net worth fell to about $1 billion – the sharpest one-day plunge ever recorded by Bloomberg’s Billionaires Index.
The outlet noted that Bankman-Fried’s stake in FTX was valued at $6.2 billion prior to the deal, while his cryptocurrency trading house, Alameda Research, was worth about $7.4 billion to his fortune. Concern about FTX’s liquidity emerged after CoinDesk reported that Alameda was heavily invested in FTT, a token issued by FTX.
The bailout itself was in grave doubt as of Wednesday. Binance told the Wall Street Journal it would walk away from its initial offer to buy FTX after taking a close look at the platform’s structure and books. Earlier in the day, a source familiar with the matter said Binance officials were “taken aback” by the extent of the platform’s financial trouble.
“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement.
It wasn’t immediately clear if talks between the two sides were dead.
The Binance deal had emerged after signs of panic about crypto investors who withdrew $6 billion in holdings in just 72 hours before the deal was announced on Tuesday.
“On an average day, we have tens of millions of dollars of net in/outflows. Things were mostly average until this weekend, a few days ago,” Bankman-Fried wrote in a message to staff on Tuesday, according to Reuters.
Zhao said his company had agreed to buy FTX on Tuesday as it suffered a “significant liquidity crunch.” The deal was pending due diligence and did not include FTX’s US operations.
The Binance bailout would mark the culmination of a stunning downfall for Bankman-Fried, who became increasingly influential in the tech world as FTX took a leading position among cryptocurrency exchanges, buying up the assets of rivals at a frenzied pace in recent months.
Bankman-Fried tapped the likes of NFL legend Tom Brady and his soon-to-be ex-wife Gisele Bündchen as partners during FTX’s rise – appearing alongside the supermodel and FTX’s head of fashion and luxury partnerships Lauren Remington Platt at the SALT Crypto Bahamas Conference last April.
Bankman-Fried leaned into the notoriety, once claiming that he could spend up to $1 billion through the 2024 presidential election while playing would-be kingmaker to mostly Democratic candidates. Bankman-Fried later walked back that figure, though recent estimates placed his midterm spending at roughly $40 million.
Brady, Bündchen and other high-profile FTX investors now stand to lose the entirety of their stakes.
“I’m sorry I didn’t do better, and am going to do what I can to protect customer assets, and your investment,” Bankman-Fried wrote in a letter to investors, according to Bloomberg.
“I wish I had more details for you guys right now; I don’t yet,” the letter added.
The Post has reached out to FTX, Bankman-Fried and representatives for Brady and Bündchen for comment on the situation.
FTX’s downfall was the latest in a series of major collapses in the cryptocurrency sector, where volatility has reigned for months during a sharp downturn in global economic conditions. Previous meltdowns impacted the TerraUSD stablecoin and the crypto hedge fund Three Arrows Capital.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
