30-year-old’s assets fall from $16 Billion to 0 in Days
Former FTX co-founder Sam Bankman-entire Fried’s $16 billion fortune has been wiped out, in one of history’s greatest-ever wealth destructions.
The failure of his crypto empire, which filed for bankruptcy alongside his resignation on Friday, means that assets owned by the mogul once compared to John Pierpont Morgan are now worthless. The 30-year-old was worth $26 billion at his peak, and he was still worth nearly $16 billion at the start of the week.
Because of a potential trading halt, the Bloomberg Billionaires Index now values FTX’s US business at $1, down from $8 billion in a January fundraising round. Bankman-more Fried’s than $500 million stake in Robinhood Markets Inc. was also removed from his wealth calculation after Reuters reported it was held through his trading firm, Alameda Research, and may have been used as collateral for loans. The bankruptcy filing also included FTX.US and Alameda.
In a statement announcing its Chapter 11 bankruptcy filing, FTX said Friday that Bankman-Fried has resigned as CEO and will be succeeded by John J. Ray III. Employees are expected to stay on and “assist Mr. Ray and independent professionals” during the bankruptcy.
This week, Bankman-empire Fried’s crumbled due to a liquidity crisis at one of its affiliates. Its US exchange, FTX.US, announced on Thursday that customers should close any open positions and that trading may be suspended in a few days. Authorities in the Bahamas, where FTX.com is headquartered, froze the assets of its local trading subsidiary and related parties.
It’s possible that Bankman-Fried owns assets that aren’t included in the Bloomberg index. Last year, Alameda made about $1 billion in profits, while FTX made hundreds of millions more.
He has more than $500 million in funds managed by Sequoia and other venture capital firms, and he is also an investor in media startup Semafor. However, if those assets are held by Alameda, they may be wiped out by its losses.
Bankman-Fried, for his part, is being investigated by the US Securities and Exchange Commission for potential securities law violations, according to a person familiar with the matter.
