Sam Bankman-Fried, the former head of the FTX cryptocurrency exchange, has lost almost all of his fortune in just a few weeks. His capital at its peak was about $26 billion, and at the beginning of November, before his cryptocurrency exchange went bankrupt, it was $15.6 billion. Now he doesn't even have $1 million on his bank account.
"Last time I checked, I had $100,000 in my bank account," Bankman-Fried said.
The FTX cryptocurrency exchange filed for bankruptcy under Chapter 11 of the US Bankruptcy Code on November 11. On the same day, Sam Bankman-Fried, the executive director of the company, left his position.
Interestingly, the FTX, which was valued at $32 billion, went bankrupt in just a few days. It suffered a liquidity problem when customers started pulling their funds out of this cryptocurrency exchange en masse, and rival cryptocurrency exchange Binance pulled out of the non-binding agreement to buy the company—albeit FTX's problems stemmed from Binance's actions as well.
Before the bankruptcy of FTX, the fortune of Bankman-Fried, 30, as already mentioned, was estimated at $15.6 billion. His share in FTX was 53%, which was worth $6.2 billion before the problems started, and his Alameda Research company was providing another $7.4 billion. However, the collapse of FTX caused both assets to depreciate and are now valued at $1.
Already on November 11, Bankman-Fried's wealth had decreased to $991.5 million; that is, by almost 94% in just one day. Now, according to Businessinsider.de, he only has about $100,000 left in his bank account.
The US Securities and Exchange Commission and the Department of Justice are currently investigating FTX's bankruptcy case. Also, Bankman-Freed was interviewed by police in the Bahamas.
The FTX story has drawn the attention of regulators around the world to the cryptocurrency market. Although this market has been around for quite some time, most countries still do not have laws regulating this market. Nonetheless, the FTX’s bankruptcy, which has affected millions of investors and caused billions of US dollars in losses, forces a change in the approach to the regulation of this sector.