FTX’s collapse has been one of the most dramatic and sudden losses of wealth in recent history.
- In just a matter of a few days, FTX co-founder Sam Bankman-Fried has lost nearly his entire $16-billion fortune.
- The cryptocurrency exchange filed for bankruptcy on Friday while Bankman-Fried resigned from the company, rendering all of his assets worthless.
- At the company’s peak, 30-year-old Bankman-Fried was worth $26 billion.
- FTX is now valued at $1 by Bloomberg Billionaires Index.
- Bankman-Fried also had a $500 million stake in Robinhood, but this is also considered worthless as it was held through Bankman-Fried’s trading house Alameda which was also part of the bankruptcy filing.
Why it’s news
On Friday, FTX announced that Bankman-Fried had resigned as CEO and the company was filing for bankruptcy. John J. Ray III taking Bankman-Fried’s place as CEO. Employees were asked to continue working with the company and assist during the bankruptcy proceedings.
“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,” Bloomberg reported.
Bankman-Friend could have additional assets that are not tracked in Bloomberg’s index, but initial reports indicate that the former CEO has gone from multibillionaire to nothing nearly overnight.
Adding to his troubles, Bankman-Fried is reportedly being investigated by the U.S. Securities and Exchange Commission.
In the coming months, FTX’s equity will likely be sold at extraordinarily low prices or liquidated in the coming bankruptcy proceedings. The effects of FTX’s bankruptcy could have much larger implications for the overall crypto industry.
FTX’s umbrella portfolio contains at least 184 investments, Fortune reports.