Sam Bankman-Fried is a successful American businessman and the chief executive officer who has a net worth of zero dollars. Sam Bankman-Fried, who is also known by his initials “SBF,” is perhaps most recognized for his role as a co-founder in the establishment of the cryptocurrency exchange FTX.
Additionally, he established Alameda Research, a company that is involved in the quantitative trading of cryptocurrencies. By way of Alameda Research, SBF is the owner of a 7.6% equity position in the stock trading app Robinhood, which he purchased for the sum of $648 million in May 2022.
Despite all of this, there were worries raised along the road about the fact that the majority of Sam’s money was invested in tokens and his ownership share in FTX. His possessions were said to be “of speculative worth” and “illiquid” by his detractors. In 2021, it was supposedly reported that a screenshot of his digital wallet showed $10 billion worth of digital currency. Nevertheless, it was also stated that $5 billion worth of coins were “frozen” and could not be converted into any other currency. In addition, FTX distributed 4 billion of these coins as part of its operation.
Sam Bankman Net Worth
Sam Bankman-Fried was one of the wealthiest persons in the cryptocurrency industry at one point in time, with a net worth that reached an all-time high of $25 billion in January 2022, shortly after FTX funded $400 million at a valuation of $32 billion. In total FTX raised $2 billion in private venture funding. Before he turned 30, Sam had already amassed a billion dollars in wealth. During the period that Bankman-Fried was managing FTX, he was lauded by onlookers for his ability to steer clear of a significant number of the legal challenges that other cryptocurrency exchanges have encountered.
Sam Bankman FTX Bankruptcy
In the days preceding November 8, 2022, there was much speculation over the liquidity of FTX. One of SBF’s competitors in the cryptocurrency industry, Changpeng Zhao, also known as CZ, is responsible for spreading the rumors. On November 8, 2022, FTX was forced to sell itself to CZ’s firm Binance for an undisclosed sum of money even though the company appeared to be on the approach of collapsing.
On November 11, 2022, FTX submitted a petition to the court for bankruptcy, and SBF resigned from his position with the company.
Sam Bankman Early Life
Sam Bankman-Fried was born on March 6th, 1992 in the city of Stanford, which is located in the state of California. Sam was exposed to the philosophy of utilitarianism from an early age because of his parents, who are both professors at Stanford Law School. During his high school years, he participated in summer programs designed specifically for academically gifted adolescents and demonstrated an aptitude for mathematics.
Sam continued his education after high school by enrolling at the Massachusetts Institute of Technology, from which he ultimately earned a degree in physics. During his time in college, Bankman-Fried maintained a blog in which he discussed subjects such as politics, athletics, and utilitarianism.
Sam Bankman Personal Life
Sam is a vegan, and each night he sleeps for about four hours. He sleeps on a bean bag chair next to his computer most of the time. Since FTX fell apart, it has been said that Sam and Caroline Ellison, the CEO of Alameda Research, were in a relationship at times.
Following the completion of his studies in physics, Bankman-Fried began working for a firm specializing in proprietary trading known as Jane Street Capital. However, he immediately became disillusioned with trading overseas EFTs and relocated to Berkeley, California in 2017 to take a position as the director of the Centre for Effective Altruism. In 2017, he laid the groundwork for what would become Alameda Research, a firm that focuses on quantitative trading.
In 2018, he devised an arbitrage strategy that enabled him to trade more than $25 worth of bitcoin daily by taking advantage of the fact that the price of bitcoin was higher in Japan. Also in 2018, Sam relocated to Hong Kong, where he eventually established FTX. The official launch of this cryptocurrency derivatives exchange took place in 2019, and it currently holds ownership of around 90% of Alameda Research.
Because it was “developed by traders, for traders,” FTX is today considered to be one of the most important exchanges for trading crypto derivatives. In the beginning, FTX was not very well known, but it quickly rose to incredible heights over approximately three years.
In 2021, FTX was successful in raising $900 million from investors such as Coinbase Ventures and SoftBank. As a result, the company was valued at $18 billion, and Bankman-Fried became one of the wealthiest individuals in the world who was under the age of 30 at the time. This resulted in FTX having a valuation that was 18 times more than it had been approximately 1.5 years previously, and it established a new record for fundraising within the industry. Sam was the owner of around 60 % of FTX.
FTX quickly obtained marketing contracts with high-profile businesses such as Major League Baseball and the Miami Heat after its stratospheric growth in 2021. By the terms of a contract signed in June 2021, the Miami Dolphins renamed their home stadium the “FTX Arena” (that ended up lasting a bit more than one year). According to reports, FTX paid an upfront total of $17.5 million to get the naming rights to UC Berkeley’s stadium, and the company also reportedly spent $10 million to secure the right to have FTX branding placed around the Golden State Warriors arena.
Late in January 2022, FTX successfully raised $400 million with a valuation of $32 billion. In November of 2022, the entirety of SBF’s empire collapsed into bankruptcy, as was previously described.
FTX Is Taken Out By Binance
Binance and FTX were friends at first. Binance was one of the first people to buy shares in FTX. Binance’s founder, CZ, asked SBF to buy out the company’s stake for $2 billion when FTX became the second-largest cryptocurrency exchange in the world, after Binance. FTX agreed to the deal and paid for it with its token, FTT.
Whatever the reason, on November 6, 2022, CZ tweeted that he was no longer comfortable with FTX’s finances and that he was going to sell all $2 billion of Binance’s FTT holdings at once. He may have seen this as a chance to kill a competitor. Within a few hours, the price of FTT dropped by 20%, and people started talking in public about how liquid FTX was.
In the end, the price dropped as much as 60%. After two days, on November 8, SBF suddenly announced on Twitter that Binance had bought FTX in a “strategic transaction.” CZ then sent out a tweet where he said “FTX asked for our help this afternoon. There is a major shortage of cash.” The terms were not made clear.
Politics and Donations
Before he fell, Bankman-Fried was well-known for saying that he planned to give away most of his money to charity at some point. He joined groups like Giving What We Can, and while Sam ran FTX, the company gave away 1% of its income to charity every year.
Sam has also given a lot of money to the political process. He gave $5,2 million of his own money to Joe Biden’s 2020 election campaign. Sam gave more than $40 million to Democratic candidates in the run-up to the midterms in 2022. He gave the fifth most money from one person during the campaign.
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