Crypto billionaire, Sam Bankman-Fried, has experienced a 94 per cent overnight decline in his wealth, according to the Bloomberg Billionaires Index.
The Bloomberg wealth index predicted that current FTX investors, such as Bankman-Fried and Alameda, will lose everything due to Binance’s upcoming bailout of FTX.
Sam Bankman’s net worth had decreased from $15.6 billion on Tuesday to approximately $1 billion today. For any billionaire on the Bloomberg Billionaires Index, the 94 per cent loss records the greatest one-day decrease.
Bankman Fried’s estimated net worth is $26 billion. When he was at his wealthiest, Bankman-Fried scored well on Bloomberg’s wealth index. However, the crypto entrepreneur is no longer included in the top 500.
If the sale of his FTX Exchange to rival Binance goes through, his fortunes will probably be “eviscerated,” the outlet reported in a piece on November 9.
Before learning of the acquisition, Bankman-Fried possessed a 53% share in FTX, with a pre-acquisition value of around $6.2 billion.
Bloomberg predicts that after the purchase with Binance is finalized, Bankman-Fried and other FTX investors would have lost everything.
According to Nairametrics, an agreement between FTX and Binance was signed yesterday. The deal’s specifics are undisclosed. But we are aware that it doesn’t include FTX. US, the exchange’s US-based division, Nairametrics stated.
Bankman-Fried claims that the agreement in place with Binance right now is only a casual letter of intent. Binance is therefore free to “get out at any point.”
CEO of Binance, Zhao Changpeng, has emphasized the lessons he took away from the most recent cryptocurrency crisis. He stated:
“Never use a token you created as collateral. Don’t borrow if you run a crypto business. Don’t use capital “efficiently”. Have a large reserve. Binance has never used BNB for collateral, and we have never taken on debt.”
The effects of FTX and Bankman-Fried will probably be greater than those of Three Arrows Capital, whose collapse only a few months prior shocked the industry.
However, the crypto sector is worried due to the speed at which the agreement was put together and the lack of facts. Many FTX investors reportedly learnt about the acquisition through Twitter, according to persons with knowledge of the incident.