In 2023, FTX founder Sam Bankman-Fried is no longer listed on the Billionaires Index. His personal wealth has taken a 94 percent dive, and the former crypto CEO says he has close to nothing, according to Bloomberg.
At just 29 years old, Bankman-Fried earned himself the title of being the richest person in crypto, according to Forbes. His company, FTX, which was founded in 2019, was valued at a whopping $32 billion.
So, how did Bankman-Fried transition from being a Massachusetts Institute of Technology (MIT) graduate to a billionaire in just four years? And how did FTX crash so suddenly? Let's see where his net worth stands currently.
Sam Bankman-Fried’s net worth was an impressive $22.2 billion, until it wasn't.
Bankman-Fried’s net worth once exceeded that of billionaire hedge fund manager David Tepper and investor Charles Schwab. Before Bankman-Fried was welcomed onto the Bloomberg Billionaires Index, he wasn’t a cryptocurrency fanatic or heavily involved in finances. Instead, Bankman-Fried was focused on studying physics at MIT, which is one of the most prestigious colleges in the world.
At MIT, Bankman-Fried took an interest in effective altruism — a movement that encourages the betterment of others through evidence and logic. Rather than take the career path that typically follows a physics degree, Bankman-Fried decided to pursue trading and joined Jane Street.
From June 2014 to September 2017, the MIT graduate worked as a trader at Jane Street where he “dealt in international exchange traded funds,” reports Bloomberg. After Bankman-Fried left Jane Street in 2017, he opened a new chapter of his life, the chapter that would lead him to become the youngest billionaire in the U.S.
In November 2017, Bankman-Fried founded Alameda Research with Google engineer Gary Wang. Alameda Research is a quantitative cryptocurrency trading firm and liquidity provider. Alameda Research managed more than $70 million in digital assets and traded roughly $1 billion per day, according to the company’s LinkedIn profile.
After watching his initial business venture excel, the Alameda founder and his partner decided to grow their portfolio by moving to Hong Kong and starting FTX in April 2019.
FTX later filed for bankruptcy, pushing Sam Bankman-Fried's net worth (way) below billionaire status.
Bankman-Fried has been removed from the Bloomberg Billionaires Index. His wealth took a 94 percent dive; the former crypto billionaire claimed to have around $100,000 in his account. The cryptocurrency exchange FTX filed for bankruptcy in November, and Sam Bankman-Fried resigned in response to the collapse.
The company's insolvency has led to a dip in withdrawals and a significant drop in FTX's native token. And since most of Bankman-Fried's assets were in FTX, it's taken a major hit to his personal wealth as well.
Entreprenuer FTX founder
Net worth: $100,000
After the collapse of FTX and Bankman-Fried's reputation, he was arrested in the Bahamas on charges of wire fraud. In January 2023, Bankman-Fried was released on a $250 million bond paid by his parents and two unnamed parties. Following his release, Bankman-Fried claimed he has $450 million in Robinhood stock, which he now seeking to fight his case.
Birthdate: March 6, 1992
Birthplace: Standford, Calif.
Education: Massachusetts Institute of Technology (MIT)
How did Sam Bankman-Fried get rich?
Bankman-Fried felt he could improve the crypto exchange space, and with his cofounder, Gary Wang, they took it to task.
"You felt like these are really central, important, valuable systems, which are really crappy right now, and we can do better than this," he told Yahoo about existing crypto exchanges. He believed they needed to be more stable for a more efficient user experience.
Their new exchange became the leading conversation on social media, and by 2021, FTX had 5 million users by the end of that year. Their daily volume was about $60 billion by May. Bankman-Fried also attributed his success to the nature of FTX and that crashes didn't happen often.
FTX opened up a multitude of opportunities for Sam Bankman-Fried.
FTX.US was “built by traders for traders.” Whether you wanted to trade Bitcoin, Ethereum, or Dogecoin, the FTX digital currency trading platform supported these cryptocurrencies and others. Just before its fall, FTX had about 1 million U.S. users and $5 million globally.
Perhaps it was the platform’s capabilities that allowed it to acquire the multiple rounds of funding it received. In 2021, FTX raised $900 million in a Series B funding round. That raised the company’s valuation to $18 billion. In January 2022, FTX raised another $400 million in funding, which brought FTX’s valuation to $32 billion.
The final round of funding FTX received had involvement from Temasek, Lightspeed Venture Partners, and SoftBank Vision Fund 2, reports Bloomberg. The company had also welcomed Shark Tank investor Kevin O’Leary as a shareholder and ambassador.
Although Bankman-Fried basically took his opportunity at success and squandered it, it doesn't mark the end of the crypto era. In fact, people like Darcy Donavan, the CMO of E-Coin Finance, believe FTX's fall "will actually propel the crypto industry forward even faster." Donovan says that Bankman-Fried's mess has actually "put Web3 into the spotlight" and gives the crypto community ample time to "make positive changes now."