The CEO of crypto powerhouse FTX lost $16 billion of his personal wealth as his business ran out of cash and had to rely on a rival to save it.
After accepting a bailout from competitor Changpeng Zhao’s Binance, Sam Bankman-Fried, 30, whose cryptocurrency startup boasted last year that it would be large enough to acquire Goldman Sachs, would see his wealth fall to $1 billion.
Greatest One-day Collapse Of A Billionaire
The 94 percent drop represents the greatest one-day collapse in billionaire history.
The value of FTX’s token, which was about $20 earlier on Tuesday, has suddenly dropped by more than 75% to a little over $5. In contrast, the value of the token for Bitcoin, the most well-known cryptocurrency, is currently $18,480.21.
FTX’s move to use its own cryptocurrency as more than $16 billion in collateral for another company controlled by Bankman-Fried was criticized by Binance’s CZ, 45, on Twitter, giving the impression that he was reveling in the miscalculation of his rival.
With a personal wealth that once reached a peak of $26 billion, Bankman-Fried is regarded as one of the most well-known figures in the cryptocurrency business.
The young billionaire gained notoriety by pledging to change the world by giving millions to charities and political causes.
According to Bloomberg’s Billionaire Index, Bankman-Fried owned approximately a 53 percent interest in FTX, which was worth approximately $6.2 billion.
His crypto trading business, Alameda Research, which added $7.4 billion to his personal fortune, was his most valuable asset.
Last Friday, reports showed that FTT, a token released by FTX, represented nearly 25% of Alameda’s $14.6 billion in assets and that FTT collateral, another token, represented $2.16 billion.
CZ’s Announcement Triggered Massive Crash
Zhao announced that his business will be selling off its FTT holdings as a result of the revelations, which caused the token’s value to drop by 80%.
Alameda’s value is anticipated to decline to $1 along with FTX. Zhao’s potential bailout of FTX and Alameda is yet unknown, raising concerns among individuals who made investments in the crypto trading firm.
Then, early on Tuesday, Zhao tweeted that FTX had requested assistance due to the liquidity crisis.
Long-term Stability For FTX?
On Twitter, Bankman-Fried expressed regret for the circumstance and cautioned that it would take some time for the dust to settle. He praised Zhao and Binance for salvaging his company and gave the assurance that investors will be safeguarded during the bailout.
Bankman-wealth Fried’s dropped by 66% throughout June-July after reaching a peak of $26 billion.
He was one of the top donors to outside organizations in April after pouring $16 million into Super PACs, and he stated that he anticipates giving more than $100 million to Democrats in the upcoming presidential race.
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