Sam Bankman-Fried Net Worth 2022: Only $900 Million Now?

Samuel Bankman-Fried is an American entrepreneur and investor who founded and is the CEO of FTX, a cryptocurrency exchange based outside the country and FTX.US, its U.S. affiliate.

He also founded Alameda Research in 2017. It is a quantitative cryptocurrency trading firm that manages assets.

In October 2022, Bankman-Fried had an estimated net worth of $10.5 billion but it has fallen sharply due to FTX’s liquidity crisis in November 2022.

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Sam Bankman-Fried Net Worth 2022: Only $900 Million Now? 5

Sam Bankman-Fried Net Worth 2022

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Who is Sam Bankman Fried?

Sam Bankman-Fried was born in 1992. His parents are Barbara Fried and Joseph Bankman, two Stanford Law professors. He is known by his initials SBF.

When he was in high school, he attended Canada/USA Mathcamp, a summer program for mathematically talented high school students.

Sam Bankman-Fried

Bankman-Fried attended the Massachusetts Institute of Technology between 2010 and 2014. While he was in MIT, he wrote articles about utilitarianism, baseball, and politics. He graduated with a degree in physics and a minor in mathematics.

Bankman-Fried was an intern at Jane Street Capital, a proprietary trading firm, and his job there was trading international ETFs After graduating from MIT, he returned there full-time.

Bankman-Fried quit Jane Street in 2017 and moved to Berkeley. There, he worked briefly at the Centre for Effective Altruism as director of development from October to November. He founded Alameda Research in November.

In January 2018, Bankman-Fried organized an arbitrage trade, moving up to $25M per day, to take advantage of the higher price of bitcoin in Japanese crypto markets compared to in America. He moved to Hong Kong in late 2018 after attending a late 2018 cryptocurrency conference in Macau. While in Hong Kong, he founded FTX, a cryptocurrency derivatives exchange. It launched in 2019.

Bankman-Fried was among industry executives who testified before the Committee on Financial Services in 2021. The hearings were held regarding regulating the cryptocurrency industry.

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Investments

He invested in Robinhood Markets Inc. when a fund he majority owns called Emergent Fidelity Technologies Ltd., bought 7.6% of the stock.

Sam Bankman-Fried had offered Elon Musk money to fund his purchase of Twitter according to messages released as part of the lawsuit between Twitter and Musk during the latter’s proposed acquisition of Twitter, on April 25, 2022. Investment banker Michael Grimes wrote that Bankman-Fried was willing to commit up to $5 billion.

Charity

Bankman-Fried supports effective altruism. He claims to pursue earning to give as an altruistic career.

He is a member of Giving What We Can and has said that he plans to donate the great majority of his wealth to effective charities over the course of his life.

Politics

Bankman-Fried has maintained that his political contributions are not meant to influence his policy goals for the cryptocurrency ecosystem. But as he said that, FTX was circulating a list of suggestions to policymakers showing that he clearly had his preferences.

He also mentioned in an interview that he preferred the Commodity Futures Trading Commission regulating and guiding the crypto industry. The CFTC favors relatively relaxed regulations for the industry, unlike other regulators like the Securities and Exchange Commission.

Bankman-Fried started making political donations at 18 when he donated $1000 to Michael Bennet. In 2020 election cycle, he contributed $5.2 million to the Biden campaign making him the second-largest individual donor to Joe Biden, second to only Michael Bloomberg.

In 2021 and 2022, he has made contributions to members of both parties. For example, he has donated to Republicans like senators Susan Collins, Mitt Romney, Lisa Murkowski, and Ben Sasse.

However, his contributions are skewed toward liberal candidates because out of his donations, $105,000 went to conservatives, and $35,872,000 went to liberals (a ratio of 1:341).

In 2022, Bankman-Fried financially supported Protect Our Future PAC. It is a Democratic political action committee designed to support “lawmakers who play the long game on policymaking in areas like pandemic preparedness and planning.” He donated the majority of the $14 million raised by May 2022 — he had donated $13 million. By June, he had contributed $23 million.

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FTX

FTX was launched in 2019. It is a Bahamian cryptocurrency exchange that is incorporated in Antigua and Barbuda and headquartered in The Bahamas. By February 2022, it had over one million users. It allowed users to trade crypto derivatives.

FTX dot com

FTX operates FTX.US, a separate exchange for US residents.

When Sam founded FTX, he did it to make as much money as possible to be used for charitable causes in line with the “earning to give” principle of effective altruism.

Partnerships and Sponsorships

Since FTX was launched, it has been involved in a number of partnerships and sponsorships. For example, in April 2021, FTX acquired the naming rights to the Miami Heat’s basketball stadium in a 19-year, $135 million deal thus renaming it FTX Arena. FTX also paid $17.5 million for the naming rights to California Memorial Stadium for ten years.

FTX Arena

In June 2021, FTX announced a partnership with Major League Baseball (MLB). The FTX logo would be featured on the uniforms of the umpires.

FTX announced a 10-year, $210 million naming rights deal with TSM, an esports organization in June 2021. They officially changed their name to Team SoloMid FTX.

TSM FTX

The same month, Tom Brady became an ambassador for FTX. As part of the deal, Brady and his wife Gisele Bündchen both took equity stakes in FTX. This was akin to other deals by crypto firms with high profile people like David Beckham when he partnered with DigitalBits and Matt Damon when he endorsed Crypto.com.

In August that year, Kevin O’Leary signed on as official spokesperson for FTX. He was to be paid for in cryptocurrency.

In September 2021, FTX announced a long-term partnership with the Mercedes-AMG Petronas F1 Team. The FTX logo would feature on the cars and uniforms of both Lewis Hamilton and George Russell. NBA player Stephen Curry is also an FTX brand ambassador.

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Liquidity Problems lead to the collapse of FTX

On November 8, 2022, there was a reported “liquidity crunch” at FTX which forced it to enter a non-binding agreement with Binance to purchase the firm. The deal does not include the sale of FTX.US.

Binance CEO Changpeng Zhao tweeted that his firm intended to sell its holdings of FTT tokens, FTX’s token. Binance had received FTT when it divested of FTX in 2021.

Binance CEO Changpeng Zhao tweet

Then, he announced the deal to acquire FTX.

Binance CEO Changpeng Zhao tweet

But he insisted that Binance had the discretion to pull out from the deal at any time.

Binance CEO Changpeng Zhao tweet

Binance selling FTT was expected to have an outsize impact on FTT’s price, due to the token’s low trading volume. When Zhao tweeted about the pending sale, there was a decline in the price of FTT and other cryptocurrencies. FTT lost 80 percent of its value in what has been a bad week for the cryptocurrency market.

Binance CEO Changpeng Zhao tweet

Zhao further urged that all crypto exchanges avoid using tokens as collateral. He noted that FTT will be “highly volatile in the coming days as things develop”.

CoinDesk reported that the bulk of the holdings of Alameda Research were FTT.

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Alameda Research

Alameda Research is a hedge fund created by Sam in 2017.

Alameda Research

It describes itself as follows:

“Alameda Research is a leading principal trading firm. We use internally developed technology and our team’s deep crypto expertise to trade thousands of digital asset products, including all major coins and altcoins, as well as their derivatives.”

As of 2021, Bankman-Fried owned approximately 90% of Alameda Research.

Alameda Research gave Voyager Digital a $500 million line of credit. Voyager is a crypto lender that ran into solvency problems.

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Sam Bankman Fried Net Worth Plummets

On November 8 2022, Sam Bankman-Fried was no longer a billionaire after losing $14.6 Billion, which was nearly 94% of his total wealth – according to the Bloomberg Billionaire Index.

FTX CEO Sam Bankman-Fried vanished from the Bloomberg Billionaires Index after his estimated wealth went down by nearly 94% to $991.5 million in a single day.

How did he lose his wealth? It was a result of Binance revealing that it intended to sell its FTT holdings prompting a massive drop in price of the token to which a majority of Sam Bankman-Fried’s net worth was tied. There was a liquidity crunch characterized by a slowdown in withdrawals and freefall in the price of FTX’s native token.

Before that, billionaire Sam Bankman-Fried was worth an estimated $15.2 billion. He had already lost half his net worth in 2022 but remained confident the crypto market would recover.

Conclusion

SBF’s rapid rise to financial success, combined with his relative youth and eccentric personality won him many admirers in the crypto industry. He was also known for sleeping on a beanbag in his office.

As an “effective altruist,” Bankman-Fried had promised to donate the majority of his fortune to charity. He has also been politically engaged having promised to spend up to $1 billion to support political candidates aligned with his beliefs.

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Sam Bankman-Fried Net Worth 2022: Only $900 Million Now? 5