Binance's Changpeng Zhao appears to have cast the death blow on competitor FTX and its "billionaire" founder/CEO, Sam Bankman-Fried. Bankman-Fried's fall from grace has been one of the more stunning losses of net worth in recent history. Despite there likely being issues under the surface prior to Tuesday, a massive $6 billion in withdrawals forced the company into a liquidity crisis. Its FTT token then crashed before SBF reached out to nemisis Zhao at Binance for a bailout.
The situation culminated in all of crypto crashing on Tuesday - including pulling down the entire stock market at points - and Bankman Fried losing a substantial portion of his net worth, according to Bloomberg. In fact, reports say he has lost 94% of his $16 billion fortune.
His fortune was $26 billion at its peak, the report says, but the future of it all is now "in doubt". Now, in a eulogy out Tuesday afternoon, Bloomberg says his fortune "will be annihilated at the hands of his billionaire rival". Going down with the SBF ship are investors like Softbank's Vision Fund (of course), Temasek and the Ontario Teachers' Pension Plan. which had $400 million invested in FTX at a $32 billion valuation.
SBF had a 53% stake in FTX that was worth about $6.2 billion prior to the week's events. The other $7.4 billion of his fortune was tied up in Alameda Research, which now appears to be completely insolvent. Bloomberg's prognosis was bleak, to say the least:
"The Bloomberg wealth index assumes existing FTX investors, including Bankman-Fried, will be completely wiped out by Binance's bailout, and that the root of the exchange's problems stemmed from Alameda. As a result, both FTX and Alameda are given a $1 value. "
They estimate that SBF's remaining fortune will be about $1 billion, or a loss of 94%. We're guessing SBF is going to need some of that remaining $1 billion for legal expenses, too.
Competitor Zhao - now at the top of the crypto heap, at least for the time being - had a fortune was as high as $97 billion back in January 2022.
Recall, we have followed the FTX/Binance story all day today - you can read our coverage and wrap up of the day's events here.