In brief

  • FTX founder Sam Bankman-Fried’s estimated fortune fell from $16 billion earlier this week to effectively nothing, according to a report.
  • The crypto exchange faced a liquidity crunch and is alleged to have misused customer funds to plug trading losses.

Amid FTX’s collapse this week, founder and CEO Sam Bankman-Fried (SBF) has rapidly transformed from a crypto industry icon and so-called “savior” into an ignominious figure, responsible for potentially billions of dollars’ worth of customer losses. And he’s apparently lost his whole fortune in the process, as well.

Bloomberg’s Billionaires Index reports that Bankman-Fried’s assets dropped in value from $16 billion at the start of the week to effectively nothing now, following news of FTX’s bankruptcy filing today. Bloomberg estimates that most of his assets were tied up in the companies, although he may have additional holdings that it doesn’t track.

SBF’s considerable crypto fortune had been valued as high as $26 billion this past spring, before the market declined. Bloomberg described this week’s personal loss as “one of history’s greatest-ever destructions of wealth.”


FTX is believed to have a several-billion-dollar hole in its balance sheet. The exchange is alleged to have used customer funds to cover losses at SBF’s trading firm Alameda Research, before suffering a liquidity crunch this week as users withdrew funds and sent the value of FTX’s FTT token crashing. SBF resigned as CEO today alongside news of the filing.

The rise

Bankman-Fried founded Alameda in 2017, profiting greatly from arbitrage trading strategies before establishing FTX in 2019. His profile started to rise in 2020, as he was touted as a “crypto savior” for helping SushiSwap after the founder of that decentralized exchange (DEX) bolted and left the community in the lurch.

FTX grew gradually into early 2021, but its profile and trading volume accelerated significantly as the company began courting the mainstream through sports and celebrity alliances. In a matter of months, FTX had sponsored the Miami Heat’s arena in a 19-year, $135-million deal, as well as esports club Team SoloMid in a 10-year, $210-million pact.

Star athletes like Tom Brady, Steph Curry, and Naomi Osaka joined up, appearing in FTX commercials and endorsing crypto to an increasingly wide audience. FTX’s Super Bowl commercial this year starring comedian Larry David only furthered that push.

Along the way, the firm raised vast troves of cash from investors: a $1 billion Series B in July 2021, another $421 million in October 2021, and $400 million more this past January. That doesn’t include fundraising for FTX US, a separate exchange serving the United States. FTX was valued at $32 billion as of its most recent raise in January.


In the spotlight

SBF’s net worth and celebrity both surged along the way, and before long he was estimated to have a $26 billion fortune. He celebrated his success by palling around onstage with Brady and model Gisele Bündchen, then Brady’s wife, at FTX’s own Crypto Bahamas conference, which also featured the likes of Bill Clinton and Tony Blair.

Bankman-Fried subscribes to the theory of effective altruism, essentially attempting to earn as much as he could through FTX and crypto trading to eventually give it all away and benefit the world. He also said he might spend up to $1 billion on political donations in the run-up to the 2024 Presidential election, but eventually backtracked from that claim.

And when the crypto industry stumbled earlier this year, he very publicly stepped in to "bail out" insolvent firms like Voyager Digital and BlockFi who had exposure to Terra’s UST and LUNA.

In August, SBF said on Decrypt’s gm podcast that bailing out Voyager Digital was probably “$70 million down the drain." He was nonchalant about bailing out Voyager and did not appear to expect the funds to be returned. “Basically, there's $70 million that we knew we would maybe never see again,” he told Decrypt.

Those companies are now left without much recourse and their executives may now be wishing someone else had stepped in to help instead.

SBF's nonchalance might have struck some as a red flag then. But Bankman-Fried was worth billions, and framed the $750 million he gave in bailouts earlier this year to Voyager and BlockFi as a part of his “responsibility” as a crypto executive.

“I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion,” Bankman-Fried previously told NPR. “Even if we weren't the ones who caused it, or weren't involved in it. I think that's what's healthy for the ecosystem, and I want to do what can help it grow and thrive.”

The fall

Behind the scenes, however, reports allege that he was improperly using FTX customer funds to stem the bleeding at Alameda. However, when FTX customers began withdrawing assets en masse and the FTT token crashed, the firm found itself in a liquidity crunch. Rival exchange Binance nearly stepped in to save the day, but changed course when it saw the size of the mess.


Now, FTX and its affiliated companies have filed for bankruptcy protection, and SBF’s estimated net worth has cratered as a result. Bankman-Fried says he’s “really sorry” for the whole mess, but Crypto Twitter isn’t having it. Neither are FTX’s users.

Potentially billions of dollars’ worth of customer assets are now largely trapped within the exchange, and may be tied up in bankruptcy proceedings for a very long time. On top of that, firms far and wide—including BlockFi—are revealing the extent of their exposure to FTX, spreading the kind of crypto contagion that SBF previously aimed to thwart.

Bankman-Fried and FTX are under investigation by at least five different U.S. regulatory entities: The Securities and Exchange Commission, the Department of Justice, the Commodity Futures Trading Commission, the Texas State Securities Board, and California’s Department of Financial Protection and Innovation.

Daily Debrief Newsletter

Start every day with the top news stories right now, plus original features, a podcast, videos and more.