The fall of crypto’s golden boy: How a 30-year-old entrepreneur’s $16 billion fortune evaporated
Sam Bankman-Fried woke up on Monday still a billionaire, even as his cryptocurrency empire was beginning to unravel. By Friday, his fortune was completely wiped out.
Based on net worth calculations by Bloomberg, Bankman-Fried was worth about $16 billion at the start of the week. But as his crypto exchange, FTX, collapsed, the value of his assets was reduced to zero in what Bloomberg called “one of history’s greatest-ever destructions of wealth.”
FTX on Friday said it filed for bankruptcy, and Bankman-Fried, known as SBF, resigned as chief executive.
The 30-year-old entrepreneur’s net worth, which was largely tied up in digital assets, peaked at around $26 billion this spring. Over the summer, as crypto prices plummeted, Bankman-Fried emerged as a white knight for the sector, using his FTX exchange and its sister hedge fund, Alameda, to secure lines of credit to crypto companies like BlockFi and Voyager that were at risk of collapsing.
He told Reuters in July that he and FTX still had a “few billion” on hand to shore up other firms and help stabilize the industry.
Bankman-Fried owns about 70% of FTX’s US business, which the index now estimates to be essentially worthless. His stake in online brokerage Robinhood, previously valued at more than $500 million, was removed from Bloomberg’s calculation after news reports said that stake was held through Alameda and may have been used as collateral for loans.
As a follower of “effective altruism,” Bankman-Fried has sought to make as much money as possible in order to give it away. But the fate of his philanthropic endeavors is now in doubt.
On Thursday, the entire staff of the FTX Future Fund, which says it has committed $160 million in grants, publicly quit. In a statement, the five-person team wrote that they “have fundamental questions about the legitimacy and integrity of the business operations that were funding the FTX Foundation and the Future Fund.”