Sam Bankman-Fried Net Worth, Crypto and NFT Investments

Born on March 5, 1992, as Samuel Benjamin Bankman-Fried (also known as SBF) is a controversial American entrepreneur and investor. He rose to fame in the crypto space in 2022. Sam Bankman-Fried’s net worth was significantly impacted by  his former cryptocurrency exchange, FTX, and Alameda Research.

A background check into his lineage indicated that Sam Bankman-Fried parents are professors at Standford Law School. His family seems to have a strong educational background as his aunt, Linda Fried is a Dean of Columbia University Mailman School of Public Health.

Sam Bankman-Fried’s academic journey saw him through Crystal Springs Uplands School and the Massachusetts Institute of Technology. Before founding FTX, SBF traded International ETFs as an intern at Jane Street Capital in 2013, before moving to the Centre of Effective Altruism in 2017. In 2018 and 2019 respectively, he founded FTX and Alameda Research.

On November 3, 2023, SBF was found guilty of all seven charges that were leveled against him. The former FTX boss’s public trial in a court in New York ended with the jury finding him guilty of two counts of wire fraud and two counts of wire fraud conspiracy. Also, he was found guilty of one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy.

Following the end of the public trial, SBF returned to court for sentencing on March 28, 2024. According to findings, each of his crimes carries a maximum sentence of five (5) to twenty (20) years in prison.

Finally, Judge Lewis Kaplan sentenced him to 25 years in prison, finally bringing a logical end to the saga surrounding what is tipped to be the biggest financial fraud in American history.

As part of the sentence, the disgraced FTX boss forfeited $11 billion, which the U.S. government will channel towards compensating victims of his fraudulent activities. 

Sam Bankman-Fried’s Initial Net Worth and Investments

At the height of his wealth, Sam Bankman-Fried’s net worth was $26 billion and most of it was tied up in FTX shares and FTT tokens. His wealth grew after he founded Alameda and FTX. Thus, emerging as one of the self-made billionaires under age 30. In less than a year, Sam Bankman-Fried net worth grew from $10 billion to $26 billion. 

In addition, SBF had a 7.6% stake which is worth more than 56 million shares in Robinhood. According to the present market rate, the shares are worth more than $530 million. Though, reports indicated that SBF acquired the Robinhood shares with the funds he looted from FTX’s customers’ deposits. Accordingly, SBF’s wealth spread across three Silvergate Bank accounts and funds custody at Moonstone bank. This account contained assets worth almost $56 million.

During this period, Forbes ranked SBF the 41st richest American on its Forbes 40 list. Also, he was ranked the 60th richest person in the World’s Billionaires. When SBF moved to the Bahamas from Hong Kong in 2021 due to strict regulations then. The embattled billionaire moved to a $30 million penthouse in Albany where he lived luxuriously. When he moved to the Bahamas, SBF purchased more than 19 properties worth $121 million. Reports revealed how SBF mostly spent thousands of dollars on lunches for himself and FTX employees.

Alameda Research

Alongside Tara Mac Aulay, SBF co-founded Alameda Research in 2017 after quitting Jane Street Capital. Initially, the firm was a quantitative trading firm but the term “research” was included in the name to avoid scrutiny. Majorly, the firm focuses on arbitrage, market making, yield farming, and trading volatility. Sam Bankman-Fried owned about 90% stake in the firm.

The following year, SBF took advantage of the difference in the price of BTC in America and Japan by organizing an arbitrage trade. As revealed, the firm earned up to $30 million from the price attained a balanced level. In 2019, the firm moved its headquarters from California to Hong Kong. 

Alameda Research played a crucial role in Sam Bankman-Fried’s net worth. Serving as a market maker, Alameda Research attracted traders to Sam Bankman-Fried’s FTX by always being willing to buy and sell with customers. At times, the market maker would concede a deficit in a trade just to lure traders to FTX. 

The value of Alameda Research soared highly as the firm charged basis points on $5 billion volume a day, with that the company was able to record about $3-4 million in income daily. Furthermore, Alameda Research invested the gains into platforms like Uniswap and Compound by providing loans to crypto enthusiasts with interest. This business strategy fetched the firm more revenue that ranged between 7% to 50%.

More so, Sam Bankman-Fried elevated traders like Caroline Ellison and Sam Trabucco into co-CEOs of Alameda Research to focus on FTX. At the height of the crypto winter in 2022, Alameda Research and FTX were all over the industry, providing financial bailouts to struggling crypto firms.

The firm got the funds from customers’ deposits with FTX. As revealed, there was a programmed “pipeline” that directly flows customers’ deposits into Alameda Research from FTX. The collapse of Alameda Research in late 2022 affected a lot of crypto firms within its blasting radius.

FTX

FTX is an abbreviation for Futures Exchange, founded in 2019 by Sam Bankman-Fried and Gary Wang, before its collapse, the firm served as a cryptocurrency exchange and crypto hedge fund. It was once the third-largest crypto exchange with more than 1 million users with its headquarters in the Bahamas. Though the headquarters of FTX was in Hong Kong before SBF shifted it to the Bahamas in 2021.

At the inception of the bankrupt crypto exchange, the CEO of Binance, a rival firm, Changpeng Zhao acquired a 20% stake in the firm which was then worth $100 million. At the height of the exchange’s boom in 2021, SBF bought out Changpeng Zhao’s stake for $2 billion. Meanwhile, a year before, FTX acquired Blockfolio, a cryptocurrency portfolio tracking platform for $150 million.

Thereafter, SBF and FTX began to expand their empire by raising $900 million at an $18 billion valuation from over 60 investors, including Softbank, Sequoia Capital, and other prominent investors in July 2021. This move birthed the creation of more subsidiaries connected with FTX, as the crypto exchange ventured into various markets across the globe. 

On January 14, 2022, SBF unveiled FTX Ventures; a $2 billion venture fund. In its series C funding, the venture raised $400 million at a $32 billion valuation in the same month. Through this venture, SBF and FTX provided financial support for struggling crypto firms. Part of these efforts saw FTX In July 2022, provided a $400 million credit facility for BlockFi. 

The spending spree extended to an auction bid worth $1.42 billion for the virtual assets of Voyager DigitalOn September 26, 2022. However, the deal failed to materialize following the collapse of FTX and Sam Bankman-Fried’s empire. Meanwhile, pointers about the crypto exchange’s irregular business practices first surfaced in August 2022 when the Federal Deposit Insurance Corporation (FDIC) issued a cease-and-desist order to FTX for making false and misleading representations about deposits being protected by FDIC.

Donations by Sam Bankman-Fried

Sam Bankman-Fried has been one of the major financial backers of Democratic Party in the U.S. From 2020 to 2022, he is the second-largest donor to the party. The then-crypto golden boy donated heavily towards the 2022 mid-term elections with the intention of lobbying for favorable crypto regulations. Reports indicate that SBF and some other FTX executives contributed about $70 million toward the 2022 midterms. 

Part of his donations include funds to Democrats and Liberal-related groups. SBF gave money to fundraising committees and super PACs affiliated with the two parties. Notably, Protect Our Future benefited more from Sam Bankman-Fried, receiving $27 million from his donation spree. The campaign is aimed at supporting candidates who will champion the prevention of future pandemic. Candidates under this campaign such as Carrick Flynn, George Rep, Lucky McBath, and Jasmine Crockett. 

Additionally, Bankman-Fried also gave a combined $7 million to the two main super PACs supporting Democratic candidates for Congress in the 2022 elections. While he gave $5,800 in person to candidates such as Debbie Stabenow, Kirsten Gillibrand, John Boozman, Lisa Murkowski, and Susan Collins.

Investment in Crypto Firms

While FTX and Sam Bankman-Fried focused on expansion and providing financial support for struggling crypto firms during the 2022 bear market. Firms like Celsius, BlockFi, and Voyager were notable beneficiaries of SBF’s spending spree. 

FTX Crisis 

The whole FTX meltdown surfaced on November 2, 2022 when reports exposed a huge hole of $8 billion in the balance sheet of FTX’s sister company, Alameda Research. The reports established that Alameda Research tied billions of dollars of its assets in FTT, a native token to FTX. Also, Alameda Research used the token as a collateral for its loans.

In reaction, the CEO of Binance, Changpeng Zhao liquidated Binance holdings of the FTT tokens citing risk management. Binance’s holdings of the token were worth around $580 million, representing 5% of the total FTT in circulation then. The liquidation triggered a freefall of the token as it dipped by 40%, resulting in an exodus of withdrawals from FTX. Consequently, the crypto exchange began to struggle with liquidity issues. 

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4

— CZ 🔶 BNB (@cz_binance) November 6, 2022

Thereafter, rumors surfaced that the CZ move is aimed at crumbling FTX. Even SBF tweeted that a rival is coming after the crypto exchange. However, CZ emphasized that the move was aimed at protecting users and the entire crypto exchange. Some days later, when the crisis deepened, Binance offered to acquire the crypto exchange but the move failed to materialize. Forcing FTX to halt the withdrawal of users’ funds.

On November 10, 2022, Sam Bankman-Fried admitted that he messed things up, tendering an apology. The following day, FTX filed for Chapter 11 bankruptcy protection in the US, including its subsidiaries and Alameda Research. The development saw Sam Bankman-Fried step down as the CEO with John Ray III coming aboard to instigate a turnaround.  

It is worth mentioning that John Ray III is famous as a restructuring lawyer who worked on the liquidation of the collapsed energy giant Enron. On December 13, 2023, while testifying before the U.S. House Financial Services Committee, the new CEO raised concerns about the irregular business activities of FTX.

During the testimony, Ray was quoted saying, “There were no corporate controls, no corporate oversight, no independent board,” Ray said. “The owners, business, and senior management had virtual control of all the accounts and could move money or assets as desired, undetected by customers.”

Initially, Voyager lost about 15,250 BTC and 350 million of USDC to the 3AC crisis. The meltdown dealt severe damage to Voyager pushing the firm to the verge of Bankruptcy till it became a beneficiary of SBF and Alameda Research’s spending spree. The sister company of FTX provided a financial bailout of $500 million to Voyager. This move later backfired as Voyager lost about $3 million of virtual assets to the crypto exchange’s crisis.

Crypto.com also suffered a $10 million exposure to FTX. More details about the exposure indicated that the former had about $1 billion on the exchange prior to the crisis. Luckily, Crypto.com already reduced it to $10 million before the crisis surfaced. Another cryptocurrency exchange that suffered from FTX’s collapse was Coinbase. According to Official sources, the exchange deposited about $15 million on FTX prior to the collapse.

Likewise, CoinShares, a virtual asset manager in Europe, had about $30 million on the crypto exchange prior to the crisis. The asset manager was able to minimize this exposure weeks before FTX exploded. A crypto hedge fund firm identified as Pantera Capital, also kept 3% of its assets in FTT. Similarly, the firm managed to liquidate a substantial portion of its holding before the token suffered a free fall.

Following the collapse of FTX, Celsius went bankrupt. The cryptocurrency lender suffered an exposure of $3.5 billion to FTX. This included a $12 million outstanding loan to Alameda. Genesis Trading, another cryptocurrency firm locked about $175 million on FTX. Also, Multicoin, a well-known venture capital firm, has about 10% of all the assets on FTX.

However, the firm has failed to disclose the value representation of this figure trapped on the crypto exchange. Likewise, bankrupt crypto lender, BlockFi suffered heavily from the liquidity crisis of FTX. Recall that the exchange provided a $400 million worth of credit facility for BlockFi. The firm finally went into bankruptcy proper following the collapse of FTX. Though Galois Capital isn’t a crypto firm, the firm suffered a loss of $100 million to the crisis.

How the FTX crisis worsened the performance of cryptocurrencies

Regrettably, the crash of FTX worsened the price performance of cryptocurrencies, particularly BTC and ETH in late 2022. Prior to the crash, the industry was already enduring a brutal downturn caused by rampant inflation and the collapse of terraUSD in May. Investors reportedly lost over $40 billion to this Terra crisis, thereby plunging the industry into a bear state.

Following this development, investors began to move their investments to a safer sector. Certainly, BTC and other crypto assets responded heavily to this market condition. Then, according to our findings, the largest crypto by market cap dipped below $20,000, its lowest low since 2020. It is noteworthy that BTC battled within this price range until November when the industry witnessed another major catastrophe in courtesy of FTX.

One of those factors that triggered the impact of the FTX crisis on cryptocurrencies was the level of contagion recorded. As mentioned in the previous section, scores of crypto firms had exposures to the exchange at the time of its collapse. More so, our findings show that investors in the crypto exchange lost a total amount of $8 billion to the crisis. This reality added to the woes of BTC and other crypto assets.

For instance, BTC tumbled below $16,000. It is not in doubt that this development further shrunk the confidence of investors and raises questions about the reliability of the industry. Additionally, the saga heightened the call for stricter and clearer regulations for the industry.

The Arrest and Ongoing Trial of Sam Bankman-Fried

Occasioned by the widespread contagion of the FTX crisis, investors languished in a state of dilemma. This thus prompted the intervention of the U.S Securities and Exchange Commission (SEC) and other authorities across the globe.

First, the U.S senate committee on banking, housing and urban affairs issued a public letter to SBF as the founder of the troubled crypto exchange to attend a congressional hearing scheduled for December 14, 2022. Interestingly, the FTX founder failed to respond to the letter or affirmed his intention to honour the invitation.

Barely a day to the congressional hearing, SBF was arrested in Bahamas. He was immediately extradited to the U.S for trial. Some of the charges against him include wire fraud, securities fraud, money laundering and many more.

USA Damian Williams: Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the U.S. Government, based on a sealed indictment filed by the SDNY. We expect to move to unseal the indictment in the morning and will have more to say at that time.

— US Attorney SDNY (@SDNYnews) December 12, 2022

Apart from SBF, the U.S. regulator also paraded former Alameda Research CEO, Caroline Ellison and Former FTX co-founder, Gary Wang for trial. SEC accused the duo of conspiring with SBF to swindle unsuspecting investors.

The SEC today charged Caroline Ellison and Gary Wang for their roles in a multiyear scheme to defraud equity investors in the crypto trading platform FTX. Ellison and Wang are cooperating with the ongoing investigation.

— U.S. Securities and Exchange Commission (@SECGov) December 22, 2022

According to the agency, Ellison, Wang and Sam Bankman-Fried compromised the value of FTT between 2019 to 2022 by buying a huge amount of the token. Through this, they were able to spike the value of FTT to mislead investors. However, as of the time of writing, only Ellison and Wang have pleaded guilty to the charges.

On December 23, 2022, the U.S court approved a $250 million bail for SBF. Although the bail came with some restrictions like seizure of his passport, home detention and location monitoring. According to verified sources, his parents met the price tag of the bail through the equity of their house.

Meanwhile, he has now been found guilty of all the allegations leveled against him. Each of the crimes carries a maximum sentence of five (5) to twenty (20) years in prison.

Crypto and NFT Holdings of Sam Bankman-Fried

Prior to the crisis that collapsed FTX, the amount of crypto holdings or investments held by SBF was not in the public domain. But, it was certain that the former FTX CEO held a huge amount of cryptocurrencies, particularly BTC and FTT. We can trace the genesis of his interest in Bitcoin to 2017.

Then, SBF discovered that despite the growing popularity of BTC, only a few firms provide its services for users in Japan. Driven by this discovery, he began to focus on a Japanese arbitrage trade. SBF leveraged this opportunity by buying BTC from the U.S to sell in Japan. This thus significantly contributed to Sam Bankman-Fried’s net worth.

SBF has also proven to be a staunch supporter of NFTs. Although, the amount of NFT holdings he held prior to the collapse of FTX might not be in the public domain, it is not in doubt that he invested in NFTs. Occasioned by his admiration for NFTs, the former CEO leveraged FTX to launch a minting platform in 2021.

In the then announcement, it was said that the platform was designed to enable lovers of NFTs to mint their collections on the exchange. Shortly after the platform went live, SBF, himself, became the first person to develop an NFT collection, known as “TEST” on it. Barely 24 hours after, the collection sold for as high as $270,000. The minting platform enabled FTX to have more than 1600 NFT collections prior to its crash. It is noteworthy that the the crash had dire implications for the values of these collections.

Sam Bankman-Fried’s Net Worth – Our Verdict

As of February 2021, Sam Bankman-Fried’s net worth was $10 billion according to New York Magazine. The net worth rose to over $26 billion in mid-2022 despite the downturns in the market. However, following the collapse of FTX in late 2022, Sam Bankman-Fried’s net worth witnessed a big fall.

This is because the majority of his investments and assets were tied to the firm and his other company, known as Alameda Research. Only a few of his assets were tied to other firms, particularly Robinhood. So, the FTX crash crippled Sam Bankman-Fried’s net worth.

SBF himself confirmed this in his defence against the charges levelled against him by the U.S. court. He lamented that he was also a victim of the crash just like other investors. This thus explains why he had to rely on his parents to secure his bail. The former FTX CEO had only $100,000 in his bank account.

Meanwhile, FTX is already walking through the path of recovery. Amid the BTC price rally in March and early April, the crypto exchange, according to its attorney, Andy Dietderich, recovered more than $7.3 billion in cash and liquid crypto assets. This thus represents more than a $750 million increase since the beginning of the year. Now, the company is hoping to fully refund all its creditors and return to business soon.

Read about more famous Bitcoin investors here.

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