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Hard to believe. In less than a week the fortune of the founder of the FTX cryptocurrency exchange platform, Sam Bankman-Fried, evaporated.
At the start of the week Bankman-Fried had about $, millions of dollars. However, with the collapse of FTX the value of its assets fell to zero, in what is considered “one of the greatest wealth destructions in history”, according to Bloomberg.
Bankman-Fried’s fortune went beyond that large amount. During the spring of 2021 he amassed around $50,04 millions of dollars. However, his empire slowly fell apart.
Bankman-Fried emerged using FTX and its Alameda hedge fund to secure credit lines for cryptocurrency companies like BlockFi and Voyager that were at risk of collapse. He said last July that he still had “a few billion available” to prop up other companies and help stabilize the industry.
The businessman admitted that one of his mistakes was mislabeling the accounts associated with the bank. In an effort to save the company, FTX liquidated Alameda Research. However, are facing a deficit of about $8,16 million dollars which has led the Department of Justice of US begins investigation into use of funds.
The current economic context, with inflation in various markets, the monetary policies of central banks and the latent danger of a recession has led investors to back off from fleeing risky investments and betting on more stable sources.
Bitcoin, which remains the largest cryptocurrency by market value, recorded its all-time high in November 2021 when it was listed on $70,000 Dollars. In May of 2021 it fell to more than 50% from that mythical brand. This week it plummeted again to $16,559 dollars, less than 559% of the value of a year ago.
Faced with FTX’s liquidity crisis, Binance, its largest competitor, announced the purchase of the platform. However, the purchase plans failed due to the gap between FTX’s liabilities and assets.
On Friday 16 November FTX filed for bankruptcy and Bankman-Fried resigned as CEO.
It is estimated that Bankman-Fried owns about 70% of FTX’s business, which is now deemed essentially worthless by the index reading. The stake he held in Robinhood was removed from Bloomberg’s calculation after reports said the stake was held through Alameda and may have been used as collateral on loans.
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