Sam Bankman-Fried’s net worth plunges from $23 billion to zero as FTX files for bankruptcy

Home Economy Sam Bankman-Fried’s net worth plunges from $23 billion to zero as FTX files for bankruptcy
Sam Bankman-Fried’s net worth plunges from $23 billion to zero as FTX files for bankruptcy

Sam Bankman-Fried’s (SBF) net worth has crumbled from $23 billion (US$16 billion) to basically zero as his empire collapses.

The crypto wunderkind’s company FTX officially filed for bankruptcy this morning, days after a liquidity crunch hobbled his cryptocurrency exchange.

“Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US,” he wrote on social media.

“I’m really sorry, again, that we ended up here. Hopefully things can find a way to recover.

“Hopefully this can bring some amount of transparency, trust, and governance to them. Ultimately hopefully it can be better for customers.”

The demise of the two companies comes after FTX shocked the crypto world by revealing it was suffering “liquidity” problems on Tuesday.

SBF had phoned his long-time rival Changpeng “CZ” Zhao, urgently requesting help – he needed emergency funding due to customer withdrawals in recent days. The requests had sparked a liquidity squeeze.

SBF was hoping Binance would come to the rescue — and at first it seemed like a deal had been struck.

“Things have come full circle, and’s first, and last, investors are the same: We have come to an agreement on a strategic transaction with Binance for (pending DD etc.) [due diligence],” SBF wrote on Twitter on Tuesday.

But the proposed deal broke down on Thursday. “As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of [FTX],” Binance wrote on Twitter.

With the bankruptcy filing today, SBF’s entire fortune has been wiped out — his assets are now worthless.

At his peak, SBF’s net worth about $38 billion (US$26 billion).

Bloomberg now estimates SBF’s FTX business is worth $1. SBF’s stake in Robinhood, valued at about $750 million (US$500 million) was held through his trading house, Alameda Research, and has been removed from his wealth calculation.

FTX confirmed that Chapter 11 proceedings had begun, SBF had resigned, and John J. Ray III had been appointed as CEO.

About 130 other companies affiliated with FTX and Alameda have also gone under (FTX Group). FTX confirmed that SBF would “remain to assist in an orderly transition”.

In the US, FTX said customers should close their positions and warned trading may be halted for a few days.

Authorities have frozen the assets of FTX in the Bahamas, where the company is based.

SBF and FTX are being investigated by US financial regulators for possible violations of securities rules, Bloomberg reports.

Meanwhile, CZ has warned the crypto sector faces “cascading effects” and likened the environment to the 2008 financial crisis. “I think that’s probably an accurate analogy,” he said at a conference.

The crypto world was rocked earlier this year by the collapse of Singapore-based crypto hedge fund Three Arrows Capital. With the downfall of FTX, the price of the world’s most well-known crypto bitcoin has plunged to $24,865.40.

“With these type of events happening, it’s devastating for the industry. A lot of consumer confidence is shaken, and I think basically it sets us back a few years,” CZ said.

“With FTX going down, we will see cascading effects. Especially for those close to the FTX ecosystem, they will be negatively affected,” he said, warning that the entire industry would face renewed regulatory oversight.

As for SBF, he’s hoping for a miracle comeback.

“This doesn’t necessarily have to mean the end for the companies or their ability to provide value and funds to their customers chiefly, and can be consistent with other routes. Ultimately I’m optimistic that Mr Ray and others can help provide whatever is best.

“I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week.”

SBF, who drives a Corolla and sleeps on a beanbag, had planned to give away his entire fortune to charity.

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