$24b to zero: Sam Bankman-Fried’s fortune dissolves in days

The entire $US16 billion ($24 billion) fortune of former FTX co-founder Sam Bankman-Fried has been wiped out, one of history’s greatest-ever destructions of wealth.

The downfall of his crypto empire – which filed for bankruptcy on Friday along with his resignation – means assets owned by the mogul once likened to John Pierpont Morgan have become worthless. At the peak, the 30-year-old was worth $US26 billion, and he was still worth almost $US16 billion at the start of last week.

“I’m really sorry, again, that we ended up here,” Sam Bankman-Fried said on Twitter.Credit:Bloomberg

The Bloomberg Billionaires Index now values FTX’s US business – of which Bankman-Fried owns about 70 per cent – at $US1 because of a potential trading halt, from $US8 billion in a January fundraising round. Bankman-Fried’s stake in Robinhood Markets valued at more than $US500 million was also removed from his wealth calculation after Reuters reported it was held through his trading house, Alameda Research, and may have been used as collateral for loans. FTX.US and Alameda were also part of the bankruptcy filing.

In announcing it was filing for Chapter 11 bankruptcy, FTX said Friday in a statement that Bankman-Fried has resigned as chief executive officer and will be succeeded by John J. Ray III. Ray, a turnaround and restructuring expert, previously served senior roles in bankruptcies including Enron’s. The initial filings offered no explanation for the firm’s downfall.

More than 130 entities tied to FTX.com, FTX US and trading firm Alameda Research Ltd. were listed in filings at federal court in Delaware, with the Alameda petition listing assets and liabilities of at least $US10 billion each. That easily makes it the biggest bankruptcy in the US this year, affecting investors and other counterparties globally.

“It’s such an unfortunate, stunning and shocking moment for the industry,” Owen Lau, analyst at Oppenheimer & Co. said. “There will be a lot of angry investors, angry customers and angry regulators around the world.”


Employees are expected to continue with the company and “assist Ray and independent professionals” during bankruptcy.

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.

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