A large part of Sam Bankman-Fried’s wealth was tied to FTX and Alameda Research – two large companies with an uncertain future.
In the aftermath of Tuesday’s FTX drama, Bloomberg reported that the crypto exchange’s CEO, Sam Bankman-Fried (SBF), had lost 94% of his $15.6 billion fortune in 24 hours.
Prior to Binance’s potential FTX buyout offer, SBF’s stake in the exchange was worth around $6.2 billion, according to the Bloomberg Billionaires Index. The other major component of his net worth, namely $7.4 billion, was tied to his stake in Alameda Research – FTX’s sister company that may now be at the brink of insolvency.
Bloomberg’s wealth index assumes that all existing investors, including SBF, will be wiped out by the Binance bailout. As a result, it assigned a value of $1 to FTX and Alameda Research.
The revised estimates put SBF’s net worth at closer to $1 billion, down significantly over the period of just one day. Bloomberg said this 94% single day loss is “the biggest one-day collapse ever among billionaires” that the wealth index tracks.
SBF’s downfall, the result of FTX and Alameda’s cascading liquidity issues, comes as a shock to those who viewed the CEO as the poster child of crypto. The billionaire’s credit lines to struggling lenders BlockFi and Voyager Digital in June caused SkyBridge founder Anthony Scaramucci to liken him to the “original J.P. Morgan” after the 1907 banking crisis.
“We take our duty seriously to protect the digital asset ecosystem and its customers,” said SBF in a tweet at the time.