billion dollars away
Fortune of the crypto king SBF is pulverized
By Jan Ganger
11/09/2022 2:07 p.m
From 16 billion dollars to 1 billion in a few hours: Such a crash is unusual even in the crypto world – and it hits a superstar of the scene.
Crypto superstar Samuel Bankman-Fried was worth almost $16 billion on Monday. A day later, “Bloomberg” estimates his fortune at only around one billion dollars and soberly states: 94 percent loss is the most severe loss a billionaire tracked by the financial news agency had to accept so far.
The crash of the 30-year-old curly head, known in the scene by his initials SBF, has a reason: the trading platform for cryptocurrencies, FTX, which he co-founded, was apparently on the verge of collapse. The stock exchange will probably be saved by its worst adversary, Bankman Frieds. And that also means that not much should be left of his fortune.
SBF was considered a flagship of the crypro scene, as a revolutionary who drives the established financial world in front of him and is courted by it. His fortune has since been estimated at a whopping $26 billion. He was one of the richest people on the planet and thought aloud that FTX could even swallow up the investment bank Goldman Sachs at some point.
But now his crypto project, run by the vacation and tax haven Bahamas, is collapsing like a house of cards. Changpeng Zhao (“CZ”), founder and owner of the world’s largest crypto exchange Binance, has a large part to play in this because he sowed doubts about the liquidity of FTX over the weekend. Customers of the smaller trading platform then wanted to withdraw several billion dollars within a few hours.
SBF first tried to reassure the customers. However, he soon acknowledged problems, and Zhao maliciously tweeted, “This afternoon, FTX asked for our help. There is a significant liquidity squeeze.” Binance stands ready to take over most of FTX and bridge the liquidity bottleneck. One now examines the books of the former rival and can withdraw at any time. FTX’s US business is unaffected. However, it only accounts for a small part of sales. FTX generated the lion’s share of its revenues from crypto transactions, which SBF was only allowed to offer outside of the USA for regulatory reasons.
Crypto hedge funds also worthless
Before the takeover bid, Bankman-Fried’s 53 percent stake in FTX was estimated at around $6.2 billion – which he is likely to have to pass on to Zhao as part of the bailout without seeing any money for it. However, even more valuable was his hedge fund Alameda, with which he exploited price differences for the same crypto products traded on different markets. “Bloomberg” put the value at around 7.4 billion dollars at the beginning of the week – and now only at a symbolic dollar.
Because Almeda is the real problem of SBF. According to crypto news site Crypto News, a “token” issued by FTX accounts for nearly a quarter of the total $14.6 billion in assets listed on Almeda’s balance sheet. Part of it is said to have been deposited as collateral for loans. The token called FTT is used in the FTX ecosystem, for example, to pay fees for crypto deals or to trade on better terms.
Apparently amid token accounting, Zhao cast doubt on the financial health of FTX while announcing that all FTTs held by Binance will be sold. The FTT price collapsed as a result. Almeda’s future is uncertain.
“CZ” will likely add FTX to its crypro empire. He is now considered the richest person on the crypto scene with an estimated net worth of more than $16 billion. However, that is significantly less than in January, when it temporarily shot up to $97 billion before the crypto crash. But the case of SBF shows impressively: If not even he is safe in the crypto universe, then maybe nobody is.