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According to Bloomberg, a crypto billionaire lost a staggering 94 percent of his wealth in a single day, breaking a record for the most money ever lost.
Sam Bankman-Fried, the founder and CEO of the cryptocurrency exchange FTX, had an estimated value of $17 billion earlier this week. He had “just” $1 billion by the time Tuesday rolled around after what could be called a particularly difficult few days. A probable sale of the business he had been running since 2019 was the cause of his fortune decreasing.
Bankman-Fried disclosed on Tuesday that FTX would be sold to competing cryptocurrency exchange Binance. In addition to a significant “liquidity constraint,” FTX was seeing investor withdrawals of around $6 billion over the weekend and Tuesday due to rumors regarding the company’s health. However, the bailout plan was scrapped as Binance CEO Changpeng “CZ” Zhao highlighted his “discretion to withdraw from the deal at any time.”
He continued, “We have chosen to liquidate any remaining FTT [the FTX digital currency] on our books due to recent disclosures that have come to light.”
Following the disclosure, according to the BBC, FTT’s value decreased by roughly 80% from the previous week.
The remaining FTX clients were promised by Bankman-Fried that their assets would be secure.
He tweeted, “Our employees are striving to clear out the withdrawal backlog as presently. “This will resolve liquidity issues, covering all assets 1:1.”
2) Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. — we apologize for that.
— SBF (@SBF_FTX) November 8, 2022
The essential thing is that customers are safeguarded, he continued, adding that it will take some time for things to settle. He had a more direct message for his staff.
According to Reuters, Bankman-Fried apologized to his staff on Tuesday. I screwed up.
