FTX founder Sam Bankman-Fried (SBF) has lost his entire FTX fortune and will not be eligible for any reimbursement as part of bankruptcy proceedings.
Key Details
- One of the largest crypto exchanges in the world faced a liquidity crisis on November 8 that resulted in its founder’s resignation and the company’s bankruptcy on November 11—causing the collapse of the crypto market in the process.
- SBF has been implicated in stealing money from FTX and shifting it to a partner company Alameda, operating one of the worst-managed financial organizations in history.
- His personal estimated fortune from FTX holdings has decreased from $16 billion to nothing in that time, The Street reports.
- Billions of dollars of user funds continue to be tied up in bankruptcy proceedings following the liquidity crisis and may take years to recover.
Why it’s News
Restructuring lawyer John J. Ray III is currently in the process of evaluating FTX’s assets and sheets, although the process is lengthy due to the company’s poor management and may take years to fully sort out and recover user funds.
Both Ray and SBF have publicly stated that none of the FTX founders and associates will receive reimbursement in the bankruptcy process and that all funds will go towards reimbursing users who lost money, The Street reports.
“No amounts will be paid under the authority requested by this motion to any of the following persons or any person known by the debtors to have a familial relationship to any of Samuel Bankman-Fried, Gary Wang, Nishad Singh, or Caroline Ellison,” says Ray.
“Every penny of that—and of the existing collateral—will go straight to users, unless or until we’ve done right by them. After that, investors—old and new—and employees who have fought for what’s right for their career, and who weren’t responsible for the downfall,” says SBF.
Backing up a Bit
SBF has yet to be formally charged by the government for his actions, although he is expected to testify before congress next month. He is actively being investigated by the Securities and Exchange Commission, the Department of Justice, the Commodity Futures Trading Commission, and the Bahaman government, which currently holds a large portion of his assets.
As we previously reported, SBF will be making his first public appearance since the collapse on Wednesday as part of the New York Time’s 2022 DealBook Summit alongside prominent politicians, CEOs, and politicians like U.S. Vice President Mike Pence, Meta Platforms CEO Mark Zuckerberg, and U.S. Treasury Secretary Janet Yellen.
