People have been looking into cryptocurrency to get rich fast and easy, but Sam Bankman-Fried, a crypto billionaire, has become a cautionary tale. The FTX CEO has lost the vast 94% of his net worth in one day. Most of his $15.5 billion are gone, leaving him with around $1 billion, according to Futurism.
The Fall of a Multibillionaire
There have been reports of a liquidity crisis within Bankman-Fried's FTX crypto exchange. Binance CEO, Changpeng Zhao, announced on Twitter that he will be acquiring FTX and signed a non-binding deal. This was an attempt to rescue FTX, however, it has been confirmed that Binance backed out of the deal.
The crypto giant announced that they wanted to support the customers of FTX, and help provide liquidity. However, Binance realized that the issues were already beyond their control, or their ability to help. According to CNBC, Binance backed out due to mishandled funds and alleged US agency investigations.
There were even rumors that this was Binance's plan all along. But, the Binance CEO Zhao denied this, and said that he did not "master plan" the collapse of his rival. He also made an email he sent to his employees public, stating that it was not good for anyone in the crypto industry. He added that the employees should not view it as a win for their firm.
Bankman-Fried informed the investors of a shortfall of up to $8 billion, which stemmed from withdrawal requests. This led to the crypto firm needing emergency funding. Another factor that led to the collapse, was Binance selling its holdings in FTT before the mentioned deal, which is FTX's native token. CEO Changpeng Zhao announced in a memo, telling his employees not to buy or sell FTT. This led to the token plummeting to $3.50 from $25 just a week ago.
Read Also: Binance Bridge Loses Crypto Worth $566 Million Thanks to Hacker
Santa Claus of the Cypto World
Bankman-Fried has been known to lend a helping hand when smaller firms are in trouble. He was even interested in working with the government, with the hopes of better regulating the web3 industry. Futurism has linked to another article, stating that more than two dozen crypto firms asked for the help of the crypto billionaire.
Ramnik Arora, an FTX executive, stated that one of those firms is the Celsius exchange, which according to the linked article, may have caused a domino effect that led to the crypto crash. Bankman-Fried even claimed that he had a few billion in US dollars for cutting deals, although there were no specifics as to who he will be helping out.
There was even a time when Bankman-Fried intended to donate much of his wealth, to charity and political causes. At one point, his net worth even reached $26 billion. Although, the once crypto giant was not immune to the whims of billionaires. According to reports, he bought a Superbowl ad that featured Larry David, and placed the naming rights to the Miami Heat's arena.
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