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One of the biggest names in cryptocurrency may have had one of the worst days as a billionaire, a status that could now be over.
What Happened: With the collapse of the FTX Token FTT/USD and a significant drop in cryptocurrencies Tuesday, many companies related to the sector saw their own values drop significantly.
One company likely already seeing a revised estimate is FTX, which had its FTX.com business acquired by rival Binance on the heels of liquidity issues.
FTX CEO and co-founder Sam Bankman-Fried was previously one of the youngest people to be ranked in the Forbes 400 list. Bankman-Fried had his wealth rise significantly over the past two years with the valuation of FTX rising.
FTX was valued at $32 billion in January.
On Monday, Bankman-Fried was ranked 95th on the Bloomberg Billionaires Index with a worth of $15.6 billion, down $620 million on the year.
After Tuesday’s crypto bloodbath and acquisition news, Bloomberg now estimated Bankman-Fried was worth $1 billion, losing 94% of his wealth in a single day. This marked the largest one-day drop (by percent) in wealth in the history of Bloomberg’s rankings of billionaires.
At his peak, Bankman-Fried was worth $26 billion.
The valuation estimate from Bloomberg was based on Bankman-Fried’s 53% stake in FTX and his co-ownership of Alameda Research, a crypto trading house. Bloomberg estimated Bankman-Fried’s wealth in both units would be wiped out and assigned $1 values to both companies.
Bankman-Fried is a majority owner of FTX.US, which was not part of the acquisition. FTX.US was valued at $8 billion in a January funding round.
Terms of the Binance acquisition have not been made public.
Related Link: Sam Bankman-Fried Welcomes Comparisons To J.P. Morgan
Why It’s Important: Many other investors and co-founders of FTX will likely take a hit on the FTX issues and its sales to Binance. Investors in FTX include Softbank, Temasek and the Ontario Teachers’ Pension Plan.
FTX co-founder Gary Wang was a newcomer to the Forbes 400 list and one of the youngest at the age of 28 with a worth of $5.9 billion earlier this year.
Bankman-Fried has seen comparisons to financier J.P. Morgan for his financing and rescue of companies — in Bankman-Fried’s case, cryptocurrency companies — by potentially acquiring assets on the cheap. The list includes BlockFi, Voyager Digital and Celsius. Bankman-Fried once suggested that FTX could even buy a larger bank such as Goldman Sachs Group GS someday.
Binance CEO Changpeng Zhao, better known as CZ, could rise up the billionaires’ list thanks to the deal. Zhao ranked 75th on Monday with a worth of $18.3 billion. Zhao has been one of the biggest losers on the year in terms of wealth, with $77.5 billion wiped out year-to-date.
Bankman-Fried had one of the biggest drops in worth in 2022 that now rivals Meta Platforms Inc META CEO and co-founder Mark Zuckerberg. Ranked 28th by Bloomberg at $37.3 billion, Zuckerberg saw $88.2 billion in wealth disappear in 2022 thanks to the falling price of Meta Platforms stock.
Zuckerberg had his wealth drop by $31 billion in one day in February after an earnings report from Meta Platforms. This was one of the largest one-day drops by dollar value ever seen.
Photo: FTX YouTube video screenshot
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Image and article originally from www.benzinga.com. Read the original article here.