New York: The entire $16 billion fortune of former FTX co-founder Sam Bankman-Fried has been wiped out, one of history’s greatest-ever destructions of wealth.
The downfall of his crypto empire — which filed for bankruptcy on Friday along with his resignation — means assets owned by the mogul once likened to John Pierpont Morgan have become worthless. At the peak, the 30-year-old was worth $26 billion, and he was still worth almost $16 billion at the start of the week.
Bankman-Fried’s assets dropped in value from $16 billion at the start of the week to effectively nothing now, following news of FTX’s bankruptcy filing today.
SBF’s considerable crypto fortune had been valued as high as $26 billion this past spring, before the market declined. Bloomberg described this week’s personal loss as “one of history’s greatest-ever destructions of wealth.”
FTX is believed to have a several-billion-dollar hole in its balance sheet. The exchange is alleged to have used customer funds to cover losses at SBF’s trading firm Alameda Research, before suffering a liquidity crunch this week as users withdrew funds and sent the value of FTX’s FTT token crashing. SBF resigned as CEO today alongside news of the filing.
FTX said in a statement that Bankman-Fried has resigned as chief executive officer and will be succeeded by John J. Ray III. Employees are expected to continue with the company and “assist Mr. Ray and independent professionals” during bankruptcy.
Bankman-Fried’s empire crumbled this week after a liquidity crunch at one of its affiliates. Its US exchange, FTX.US, said on Thursday that customers should close out any positions they want to and that trading may be halted in a few days. In the Bahamas, where FTX.com is based, authorities froze the assets of its local trading subsidiary and related parties.
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