Just weeks ago, Sam Bankman-Fried was considered crypto’s version of John Pierpont Morgan, willing to throw around his massive fortune to save the industry.

The curly-haired 30-year-old known as SBF was everywhere, backing flailing projects including BlockFi, Voyager Digital and Celsius. From the Bahamas, he invested in Robinhood Markets Inc., raising speculation that he’d take over the trading app. And why not? Just last year he said that once his FTX was big enough, it could swallow CME Group Inc. or Goldman Sachs Group Inc.

And he looked poised to leverage his fortune — $26 billion at its peak — to shape the world, donating millions to Democrats and promising that one day he’d give it all away to political causes and charity.

Now, the future of all of it is in doubt.

In the span of days, it became clear that Bankman-Fried and FTX were in the midst of a liquidity crunch and needed a bailout of their own. Changpeng Zhao’s Binance swept in to take over, and, while exact terms weren’t disclosed, it’s likely that SBF’s $15.6 billion fortune will be annihilated at the hands of his billionaire rival.

That might come as a shock to investors including Softbank Vision Fund, Singapore wealth fund Temasek and Ontario Teachers’ Pension Plan, who sunk $400 million into the exchange at a $32 billion valuation in January. But it also put the broader crypto industry on notice: If SBF isn’t safe, who is?

Record Wipeout

Bankman-Fried’s 53% stake in FTX was worth about $6.2 billion before Tuesday’s takeover, according to the Bloomberg Billionaires Index, based on that fundraising round and the subsequent performance of publicly traded crypto companies.

FTX wasn’t Bankman-Fried’s most valuable asset, though. That was his crypto trading house, Alameda Research, which contributed $7.4 billion to his personal fortune.

The Bloomberg wealth index assumes existing FTX investors, including Bankman-Fried, will be completely wiped out by Binance’s bailout, and that the root of the exchange’s problems stemmed from Alameda. As a result, both FTX and Alameda are given a $1 value.

That leaves SBF’s net worth at about $1 billion, down from $15.6 billion heading into Tuesday. The 94% loss is the biggest one-day collapse ever among billionaires tracked by Bloomberg.

Alameda was founded by Bankman-Fried, formerly a trader at Jane Street, and Gary Wang, an engineer who’d previously worked at Google. They found a niche: arbitraging pricing differences in cryptocurrencies in different countries, and soon expanded into a range of quantitative crypto trading strategies.

It seemed highly profitable. Bloomberg in September reported the firm made about $1 billion in 2021. But questions remained about how FTX and Alameda interacted with each other.

CZ rugpulled FTX and then performed a so called hostile takeover. Wow!

Imagine having a name like bankman-fried

In just 15 mins, you could lose 15% or more of your net worth in crypto.

In just 15 mins, you could lose 15% or more of your net worth in crypto.

In just 15 mins, you could lose 15% or more of your net worth in crypto.

Absolutely Brootal.

It sounds like this was some merchant-tier horsechit so I'm glad he went bankrupt.

BRB they "leveraged pricing differences for different cryptos in different countries," so it sounds like they created a derivatives FOREX market whereby they could buy BTC for $X and sell it for 1.1X Euro and this is how they made their money.

That delivers no value to the consumer is a purely extractive. It removes capital from capital markets and deposits it into the pocket of the merchant.

investors including Softbank Vision Fund, Singapore wealth fund Temasek and Ontario Teachers’ Pension Plan , who sunk $400 million

lmfao at the comments ITT.

Alameda (sister hedge fund of FTX - the cryptocurrency exchange platform) went broke because:

1. It collaterized the FTX token (FTT) which is relatively illiquid. Binance has a chunk of FTT from the FTX strategic sale round threatened to dump $500m worth on the open market causing a price plummet. This means there are margin calls on the collaterized FTT.

2. FTX fraudulently lent customer deposits on their trading exchange to Alameda for further money making purposes (i.e. market making, lending, investing, speculating, exorbitant spending (i.e. stadium deals)) etc.

Alameda is up to $6b in the hole, so all the funds they absconded from FTX by Alameda is gone. Cucks that only know how to centralized exchanges will be blown the **** out now and for all time.