Crypto billionaire Sam Bankman-Fried may not be able to claim the “billionaire” accolade anymore after an estimated 94% plummet in his personal wealth overnight, according to the Bloomberg Billionaires Index.
Bankman-Fried was once a high rider in Bloomberg’s wealth index, with an estimated net worth of $26 billion at his peak. However, the crypto entrepreneur is now no longer appears in the top 500.
Before the Binance takeover announcement, Bankman-Fried’s 53% stake in FTX was worth around $6.2 billion. He also maintained ownership of Alameda Research, adding a further $7.4 billion to his personal fortune.
The Bloomberg wealth index assumes that Bankman-Fried and existing investors will be wiped out by the Binance takeover, and values the two companies at just $1.
This means that Bankman-Fried is now worth around $1 billion, down from $15.6 billion on Nov. 8 in the “biggest one-day collapse ever among billionaires tracked by Bloomberg.”
Details on the takeover have not been divulged yet, but it does not include the United States arm of the exchange, FTX.US. The American-only exchange was valued at around $8 billion earlier this year.
The agreement between the exchanges so far is only a non-binding letter of intent which Binance is able “to pull out from […] at any time,” according to Binance CEO Changpeng Zhao.
On Nov. 8, Zhao posted his “two big lessons” from the latest crypto debacle. The first was never using a token that the exchange has created as collateral. Secondly, crypto businesses should not borrow or use capital “efficiently” but have a large reserve instead.
FTX Token (FTT), the exchange’s native token at the epicenter of this latest crypto contagion, has tanked a whopping 75% over the past 12 hours. The collapsed FTT token was trading at $4.86 at the time of writing, down 94% from its September 2021 peak of $84.18.
Update (Nov. 10, 1:45 AM UTC): The quote regarding Binance’s ability to rescind its deal with FTX was previously incorrectly attributed to Sam Bankman-Fried instead of Changpeng Zhao, and has been changed to reflect that.
Sourced from cointelegraph.com.
Written by Martin Young on 2022-11-11 15:45:57.