FTX’s CEO Sam Bankman-Fried has dropped off from the Bloomberg Billionaires Index after his estimated personal wealth fell nearly 94% in a single day to $991.5 million, according to reports.
Binance CEO Changpeng “CZ” Zhao announced on Tuesday that he had signed a provisional agreement to acquire FTX after concerns about the Bahamas-based exchange’s apparent insolvency grew, causing withdrawals to slow and the price of FTX’s native token to plummet.
Sam Bankman-Fried was worth an estimated $15.2 billion prior to his company’s cash crunch, but according to Bloomberg, $14.6 billion was lost overnight. Bankman-Fried’s rise to financial success, combined with his youth and eccentric personality – including his alleged penchant for sleeping on a bed of nails. According to Bloomberg, Bankman-Fried’s 53% ownership in FTX was worth $6.2 billion and his other $7.4 billion fortune came from his cryptocurrency trading firm, Alameda Research.
In order to alleviate a severe liquidity shortage, CEO Sam Bankman revealed on Tuesday that his cryptocurrency exchange FTX is being sold to competitor company Binance. With Binance‘s purchase of FTX, both FTX and Alameda are now valued at $1 on Bloomberg’s wealth index, thereby eliminating the perceived value of Bankman-largest Fried’s holdings.
Could Sam Bankman-Fried’s career be over now?
When FTX CEO Sam Bankman-Fried bailed out a string of struggling crypto companies earlier this year, the 30-year-old billionaire was hailed as the next coming of J.P. Morgan. He cast himself as the shield that would protect crypto even if it hurt him financially, saying to Forbes, “You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilize things and protect customers.” He went on to say that there would be more pain coming. “There are some third-tier exchanges that are already secretly insolvent.”
Despite today’s market rout, the FTX token that sparked the commotion has only lost about 74% of its value in the past two days. Sam Bankman-Fried remains a billionaire many times over and now he is going to have to make a choice. He can try to stick it out in crypto and perhaps work for his friend, adversary, or frenemy Changpeng Zhao. He also remains the CEO of FTX.US, the considerably smaller affiliate of FTX.
In addition, it’s possible that regulators and law-enforcement officials will look into his FTX dealings, which could make some of these questions moot. Right now nobody is claiming that fraud occurred, but crypto has been a target for authorities during the best of times. When collapses on this scale happen, one can be certain that governments will investigate.
$15.6 billion in fortune
More recently, Anthony Scaramucci, who served as former president Donald Trump’s brief White House director of communications, and Bankman-Fried came to an agreement. Skybridge Capital, the alternative investment firm established by Scaramucci, a.k.a. “The Mooch,” will be acquired by FTX Ventures for 30%. Bankman-Fried said at the time that he feels they “have a responsibility to really consider intervening, even if it is at a loss to ourselves, to halt contagion.”
Due to his newfound prominence, he is now a significant supporter of the political campaigns of politicians that support cryptocurrency and a confidant of legislators and regulators. While Sam Bankman-Fried’s primary residence is in the Bahamas, where his company FTX.com is registered, he has been spending more time in Washington, D.C., in recent months.
Tom Brady of the NFL and Stephen Curry of the NBA are the FTX cryptocurrency exchange’s ambassadors.