(RepublicanWire.org) – Sam Bankman-Fried who some referred to as the next Warren Buffet lost close to 94% of his estimated $15.6 billion net worth in one day. According to Bloomberg, that’s the biggest one-day collapse on record for a billionaire.
Bankman-Fried, 30, founded a Bahamas-based crypto exchange called FTX in 2019. By 2021, investors valued the company at $18 billion.
Earlier this year, the value more than doubled, when combined with its U.S. operations, bringing it up to $40 billion.
However, by Friday morning, FTX was valued at $1 before the bankruptcy announcement.
FTX’s failure goes beyond finance. The company had major sports sponsorships as well, including Formula One racing, a sponsorship deal with Major League Baseball as well as a sports arena in Miami. Mercedes said it would remove FTX from its race cars starting this weekend.
Bankman-Fried has other problems as well. On Thursday, a person familiar with the matter said the Justice Department and the Securities and Exchange Commission were looking into FTX to determine whether any criminal activity or securities offenses were committed.
The investigation is centered on the possibility that FTX may have used customers’ deposits to fund bets at Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators. Financial company MF Global effectively failed for a similar practice roughly a decade ago when it intermingled client assets with its own bets.
Bankman, said in a rapid series of tweets on Thursday. He also promised to continue trying to save the company.
Bankman-Fried is a prominent Democratic donor.
Vivek Ramaswamy said, Bankman-Fried tried to play the same game by donating $30million to democrats as Goldman, but didn’t donate enough to save himself from criminal charges.