One of the foremost names in crypto just lost 94 percent of his net worth.
Look, there's having a bad week, and then there's what Sam Bankman-Fried has just gone through.
The FTX CEO suffered the biggest one-day loss ever experienced by a billionaire.
Advert
Grab your popcorn, because we can honestly see Martin Scorsese directing this story.
So, for those of you not well versed in crypto-currency, Bankman-Fried is a big deal.
The crypto CEO was at the helm of FTX, a currency exchange company that has grown exponentially in recent years and brought Bankman-Fried a huge amount of wealth - we're talking $26 billion at its height.
With FTX growing, Bankman-Fried had started investing in other projects, including Robinhood Markets Inc., you know the app that caused all the GameStop chaos?
Advert
There was even chatter that the crypto king might take over Robinhood, solidifying his name as one of the leads in crypto.
And, for the most part, he had pretty good intentions for his earnings, investing back into the industry and pledging that one day his profits would all go to charity or political causes.
That was until FTX was on the brink of collapse after a liquidity crunch...
Advert
A liquidity crunch is when cash is in short supply at a company, but demand for it is high, driving its value down.
This led to a rescue deal swooping in from rival company Binance, run by Changpeng Zhao.
Zhao wrote on Twitter, that the company "asked for our help" before adding that "there is a significant liquidity crunch" occurring at the company.
While, as Zhao notes, FTX has 'the discretion to pull out from the deal at any time' its existence means that Bankman-Fried's 53 percent stake in the company, worth around $6.2 billion, as estimated by Bloomberg, is in jeopardy.
But, that's not the only asset at risk, the crypto CEO has amassed $7.4 billion from his trading house Alameda Research, which given the bailout, means that it has also lost its value to investors.
Advert
In short, all of this means that both FTX and Alameda Research are now valued at $1 each.
And given that these two sources of income were responsible for 94 percent of Bankman-Fried's $15.6 billion fortune, it's safe to say he didn't have the best week in the world.
For anyone wondering, the crypto lead is still a billionaire, with a current estimated worth of $1 billion, which is still way more than most.
Topics: Money, Bitcoin, Cryptocurrency, US News
Shola Lee