The major headline in the cryptocurrency world is that Binance is acquiring FTX.com. Now this has a major adverse consequence on the fortunes of one of the founders of FTX.com, Sam Bankman-Fried (SBF).
30 year old Sam Bankman-Fried is the CEO and co-founder of FTX.com, a cryptocurrency exchange and FTX.US, its U.S. affiliate. According to the Bloomberg Billionaires Index before Tuesday’s takeover by Binance, he was worth $15.6 billion.
His 53% stake in FTX was worth about $6.2 billion while his crypto trading house, Alameda Research contributed $7.4 billion to his personal fortune. $14.6 billion was wiped out overnight after the takeover.
Back in April, 2022, Sam’s company FTX.com was the No. 3 crypto exchange by volume handling $15 billion of trading on a good day. “Ideally, I would want FTX to become the biggest source of financial transactions in the world.”
Earlier in the year, he had promised to donate the majority of his fortune, at the time valued at $21 billion, to charity. He also promised to spend up to $1 billion to support political candidates aligned with his broader mission of preparing for future pandemics
Who is Sam Bankman-Fried?
The son of two Stanford law professors, Sam Bankman-Fried studied physics at MIT and graduated in 2014. He began his professional career as a trader at Jane Street Capital, specialising in arbitrage trading strategies focused on exchange-traded funds (ETFs). An arbitrage trade is where a trader purchases an asset in one market and instantly sells it for a higher price elsewhere, locking in a risk-free profit.
Bankman-Fried founded the quantitative trading firm Alameda Research in November 2017 and crypto exchange, FTX.com in 2019.
Next steps
Though the detailed terms of the takeover of FTX.com by Binance, it is obvious that SBF’s $15.6 billion fortune will be eradicated. However Bloomberg estimates that the takeover would leave SBF’s net worth at about $1 billion, signalling the 94% loss to be the biggest one-day collapse ever among billionaires tracked by Bloomberg.
Binance’s acquisition doesn’t involve FTX.US, a separate exchange also majority-owned by Bankman-Fried. FTX.US was valued at $8 billion in a January fundraising round.
