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Who is Sam Bankman-Fried, the billionaire who lost most of his fortune in one day? – Ost-France evening edition

By Nicolas Hasson-Fauer

American billionaire Sam Bankman-Fried, simply 30, is thought of one of the richest and most influential figures in the cryptocurrency world. He lost 94% of his fortune, which was nonetheless estimated at greater than 15 billion euros, on November 8, 2022, in one day. Here is the story of his rise and fall.

Turning barely, he appears to be like into the photographer’s lens. A small smile appeared on his face with youthful options, shaved cheeks and tousled hair. This portrait of American billionaire Sam Bankman-Fried depicts the biography that the prestigious journal Forbes Dedicated to him. The journal tells his story, because it does with many enterprise figures. But at this time, this textual content is written in the previous tense. “Sam Bankman-Fried Was One of the Richest People in the Cryptocurrency World”, we learn there. On Tuesday, November 8, 2022, his fortune was estimated at about 15.6 billion {dollars} (the similar in euros) by the Bloomberg information company. But it crumbles in a short time: the 30-yr-outdated lost 94% of it in one day. Today, he would nonetheless have a billion {dollars}. A brutal decline, commensurate with its speedy development.

“World’s Richest Person Under 30”

In purple, the message displayed on the dwelling web page of the FTX web site, Thursday, November 10: “We are at the moment unable to withdraw funds, and we strongly advise in opposition to depositing funds. (Screenshot: ftx.com)

How do you lose billions of {dollars} in a day? To perceive, we should first return to the origins of Sam Bankman-Fried’s fortune. It consists of three letters, or relatively: FTX. A cryptocurrency change platform that enables shopping for or promoting some of these digital currencies like Bitcoin. Allowed, as a result of “We can not at the moment withdraw, and we strongly advise in opposition to depositing funds”According to a message printed on the web site’s dwelling web page, readable this Thursday, November 10

Read extra: How Mark Zuckerberg lost $6 billion an hour from Facebook

So far, the story of Sam Bankman-Fried is successful story. The son of regulation professors at the prestigious Stanford University in California, he studied physics at the Massachusetts Institute of Technology, MIT, one other elite American establishment. Then, he began in finance, began investing in monetary markets after which turned to cryptocurrencies at the finish of 2017.

He moved to Hong Kong the following yr. And, in 2019, Sam Bankman-Fried arrange the FTX platform. Here startup traders are borrowing cash to wager on the future worth of a cryptocurrency, a apply “dangerous” And “Still unlawful in the US”American Daily Note The New York Times . And it really works. In 2021, he is 29 years outdated and is “One of Hong Kong’s richest personalities and the world’s richest individual below 30”According to the newspaper Nikkei Asia .

“White Knight”

Next, Sam Bankman-Fried, “SBF” as he calls himself on social networks Follow tooThe firm moved its headquarters to the Bahamas, a rustic with extra tax benefits than benefits. “One of the few nations with a complete cryptocurrency licensing system”, he most well-liked to remark in feedback reported by Agence France-Presse (AFP). Its operations notably embrace the FTX and FTX US platforms: the latter for the US, the former for the relaxation of the world. Their mixed worth was estimated at $40 billion by the begin of 2022, in line with Forbes. His fortune will prime out at $26.5 billion.

Read extra: Who is Vitalik Buterin, the creator of this cryptocurrency who grew to become a billionaire at the age of 27?

Sam Bankman-Fried grew to become a outstanding determine. In 2020, he is supporting Democrat Joe Biden’s election marketing campaign with greater than $5 million. His firm creates prestigious partnerships, particularly in the world of sports activities. It has attracted a big quantity of traders, from the American firm BlackRock to the Canadian province of Ontario’s lecturers’ pension fund, the British each day notes. The Financial Times In October 2021.

But in current months, the cryptocurrency market has taken a nosedive, which explains why Sam Bankman-Fried’s fortunes had been already in decline earlier than his downfall. In this context, he got here to the rescue of a number of actors in bother, nicknamed him by his followers at occasions. “White Knight” At the starting of mid-November once more Dr “The Most Important Person in the World of Cryptocurrency”According to the prestigious British journal Economist . Before FTX’s collapse.

“It’s very shocking and, in a manner, scary”

Until final week, Sam Bankman-Fried was thought of “the most influential determine in the world of cryptocurrency,” in line with British journal The Economist. This undated portrait was obtained by Reuters in July 2022. (Photo: Handout through FTX/Reuters)

The causes for FTX’s decline are complicated and exhausting to see. These are particularly discovered on FTT, the cryptocurrency facet of the platform. Wednesday 2 November, specialised web site coindesk Claims {that a} good portion of Sam Bankman-Fried’s funding fund Alameda Research’s property are made up of FTT. This is an issue: the firm exposes itself to vital threat if the value of FTT falls, as can occur in the world of cryptocurrencies. Which additionally solid doubt on the monetary stability of FTX.

Read extra: The fall of Adam Newman, the businessman who wished to make $1,000 billion

Then comes one other very influential determine: Changpeng Zhao, the Canadian boss of the Binance platform, has an enormous following on social networks the place he calls himself “CZ”. In the course of, he introduced that Binance would divest its property in FTT. Investors fled: on FTX, they withdrew 6 billion {dollars} in 72 hours, Reuters information company famous on Tuesday, November 8, 2022.

The value of FTT is falling as proven in this graph from the specialised web site CoinMarketCap These varied occasions led to the collapse of the fortunes of Sam Bankman-Fried, who had constructed it on his holdings in FTX (about half the shares) and FTT.

The value of FTT, FTX’s cryptocurrency, has dropped. (Screenshot: coinmarketcap.com)

The function that Changpeng Zhao and his firm performed in bringing down the platform “sophisticated”Note once more coindesk . But nonetheless on Tuesday, Binance signed a letter of intent to purchase the platform. However: The company has changed its mindAnd the future of FTX and its founder is unsure.

Sam Bankman-Fried’s story tells quite a bit about the world of cryptocurrency. Beyond the fall of the billionaire, this reveals how a lot of an actor this universe is “fragile”, Bloomberg analyst Paul Gulberg notes. this “Very shocking and in a manner, scary”he concluded.

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