Sam Bankman-Fried's $32 billion crypto exchange empire collapses
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Cryptocurrency billionaire Sam Bankman-Fried has lost nearly all of his material wealth after his FTX Group filed for bankruptcy on 11 November.
The 30-year-old MIT graduate created the FTX company in 2019 and built it up to be the fourth largest crypto exchange in the world, peaking at a value of $32 billion.
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Hide AdAlongside creating a crypto empire, the self-made billionaire established himself as a titan of finance with some publications comparing him to Warren Buffet.
Before the Chapter 11 bankruptcy was filed, Sam Bankman-Fried was a major donor to Democratic candidates, donating $5.2 million to Joe Biden during his 2020 presidential campaign.
In September 2022, Bankman-Fried’s advisors even offered to help Elon Musk in his acquisition of social media app Twitter on the FTX CEO’s behalf, with investment banker Michael Grimes writing that Sam was willing to commit to $5 billion.
However, after three years of successful business, FTX, its sister trading firm Alameda Research and 130 affiliated companies collapsed following a run on deposits that left Sam Bankman-Fried’s group with a $8 billion shortfall.
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Hide AdAccording to Forbes, the purpose of Alameda Research was to ‘act as a liquidity provider on FTX,’ and was successful in avoiding the 2022 liquidity crisis until now.
The company's Chapter 11 announcement on Twitter last week revealed that Sam Bankman-Fried had stepped down from his role as CEO and was due to be replaced by John J. Ray III, to navigate the process.
Following the announcement, Sam Bankman-Fried opened up about the filing for bankruptcy declaration in an interview stating it was the ‘biggest mistake’, but admitted that he was distracted with other commitments to notice FTX running into trouble.
He said: “Had I been a bit more concentrated on what I was doing, I would have been able to be more thorough. That would have allowed me to catch what was going on on the risk side.”
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Hide AdSam added that the people in charge of the bankruptcy filing process are, “trying to burn it all to the ground out of shame,” while the most important task at hand was “(raising the money) for the rest of my life.”
Sam lived and worked in Nassau, Bahamas in a stunning penthouse alongside some of his FTX employees, but has since put up the $40 million home for sale to try and cover costs.