(Bloomberg) — The entire $16 billion fortune of FTX co-founder Sam Bankman-Fried has now been wiped out, one of history’s greatest-ever destructions of wealth.
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The downfall of his crypto exchange and its trading house, Alameda Research, means assets owned by the mogul once likened to John Pierpont Morgan have become worthless. At the peak, the 30-year-old was worth $26 billion, and he was still worth almost $16 billion at the start of the week.
The Bloomberg Billionaires Index now values FTX’s US business — of which Bankman-Fried owns about 70% — at $1 because of a potential trading halt, from $8 billion in a January fundraising round. Bankman-Fried’s stake in Robinhood Markets Inc. valued at more than $500 million was also removed from his wealth calculation after Reuters reported it was held through Alameda and may have been used as collateral for loans.
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.
For his part, Bankman-Fried is being investigated by the US Securities and Exchange Commission for potential violations of securities rules, a person familiar with the matter said.
FTX.com is facing a liquidity shortfall of as much as $8 billion, and Bankman-Fried has been trying to raise new funding to rescue his business. He’s in talks to raise $9.4 billion from investors including Justin Sun, crypto exchange OKX and a group of funds, Reuters reported. FTX said it reached an agreement with Sun’s Tron that will allow users to withdraw some tokens from the troubled exchange.
At the same time, FTX.US employees are seeking to sell parts of the business, in some cases without Bankman-Fried’s participation, people familiar with the matter said.
–With assistance from Tom Maloney.
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