Sam Bankman-Fried, CEO of FTX, had a fortune of $1 billion on Tuesday after being valued at $16 billion earlier in the week. According to the report, it represents the largest wealth collapse a billionaire has ever experienced in a single day.
To alleviate a severe liquidity shortage, the 30-year-old CEO revealed on Tuesday that his cryptocurrency exchange FTX is being sold to competitor company Binance. 53% of Bankman Fried’s ownership in FTX was worth $6.2 billion and his other $7.4 billion fortune came from his cryptocurrency trading firm.
With Binance’s purchase of FTX, both FTX and Alameda are now valued at $1, thereby eliminating the perceived value of Bankman-Fried’s largest holdings.
The world’s wealthiest people frequently experience sudden losses of this scale but never before has a billionaire lost such a sizable amount of their fortune in a single day. On February 3, the day after losing $29 billion, Mark Zuckerberg, the creator of Meta, was still thought to be worth $84.3 billion.
Tesla CEO Elon Musk lost $50 billion in two days in November 2021 when he polled Twitter followers on whether he should sell 10% of his stock in his company — but he remained the world’s richest person by the end of the week.
Similarly, Amazon founder Jeff Bezos preserved his place as the world’s second-wealthiest man in 2019 despite losing $36 billion overnight when he gave up 25% of his Amazon stock to settle his divorce with his ex-wife MacKenzie Scott.
Trader Bill Hwang lost his entire $20 billion wealth in two days in March 2021 after his company Archegos Capital Management failed on its loans, coming close to breaking Bankman Fried’s previous record. The Justice Department then filed 11 criminal counts against Hwang, including one for fraud, and claimed that he had inflated his portfolio to obtain larger bank loans. Both he and his former CFO have denied the accusations.
The losses suffered by Bankman-Fried this year follow a severe $600 billion crypto meltdown. Changpeng Zhao, the founder of Binance, the cryptocurrency exchange that is purchasing FTX, lost $79.4 billion of his fortune this year as a result of the meltdown.
