Sam Bankman-Fried lost $14.6 billion overnight
Sam Bankman-Fried has vanished from the Bloomberg Billionaires Index after his estimated personal wealth fell nearly 94% in a single day to $991.5 million.
Bankman-Fried was worth an estimated $15.2 billion before his company's cash crunch, but according to Bloomberg, $14.6 billion was lost overnight. SBF became one of the crypto industry's darlings due to his rapid rise to financial success and eccentric personality.
Binance to acquire Sam Bankman-Fried’s FTX
With the market moving as it is, it may take some time for bulls to recover, especially since the circumstances surrounding FTX's insolvency and whether or not CZ can bail out SBF remains unclear.
FTX was reportedly seeking funding from Silicon Valley and Wall Street billionaires to cover the bank run on its exchange, according to Semafor. This is surprising given that SBF previously stated that FTX's client holdings are not invested anywhere. However, it appears that one of the world's largest exchanges was looking for $5-6 billion to cover the liquidity crisis.
Meanwhile, Binance CEO CZ announced his intention to purchase FTX after concerns about the Bahamas-based exchange's apparent insolvency grew, causing withdrawals to slow and FTT tokens to plummet. However, they have signed a non-binding letter of intent, which means CZ can back out of the deal if FTX's problems are more severe than anticipated.
Prior to this, CZ announced on Sunday his plan to sell off his remaining FTT token holdings, which he acquired as part of his exit from FTX.
What does this mean for cryptocurrency?
Even if Binance acquires FTX, antitrust laws may apply, and it is still being determined whether both entities can proceed with the merger.
Furthermore, FTT's bleeding appears unabated (down 70% for the day), which may make the exchange unappealing for acquisition, especially if most customers have already left.
Suppose this turns out to be another case of retail suffering massive losses. In that case, regulators may be compelled to impose stricter rules, further restricting the freedom crypto has relished in recent years.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.