Democrats’ millennial cash cow is turning belly up, as his company collapsed and 94% of his net worth was erased during an election in which he donated millions to liberal campaigns.
Sam Bankman-Fried, 30, known in online circles as SBF, is founder and former CEO of FTX, a massive cryptocurrency exchange that fell apart last week after it didn’t have the funds to back users’ requests to liquidate their assets.
Among rumored reasons for FTX’s insufficient bankroll was SBF’s misuse of billions of dollars’ worth of consumers’ investments, including his $135 million now-defunct purchase of naming rights for American Airlines Arena where the Miami Heat play. The 30-year-old also allegedly used users’ funds to finance risky bets by his trading firm, Alameda Research.
Before the company’s embarrassing crash, SBF’s net worth was estimated at $16 billion – and $26 billion at its peak – with many in the crypto and banking world considering him the next financial messiah.
However, SBF’s outlook turned dim quickly as his newly garnered fortune plummeted to less than $1 billion on election day – the largest-ever one-day decline of a billionaire’s net worth, according to Bloomberg.
On Friday, FTX announced it had filed for bankruptcy along with its roughly 130 companies in the FTX Group – including Alameda Research – and that SBF was stepping down as CEO.
While SBF’s seemingly self-inflicted financial loss is notable, the Democratic Party is also set to lose one of its most valuable megadonors. The nearly $40 million SBF donated to the Democrat Party for the 2022 midterms was the second-most of any donor in the world, according to Open Secrets, sitting behind only George Soros, who regularly dumps over $100 million into Democratic entities during election cycles.
SBF was one of the earliest and largest driving forces behind the new Democratic super PAC Protect Our Future, which bankrolled candidates who would “give our nation the best shot at ensuring the devastation that has occurred as a result of the COVID-19 pandemic never happens again,” according to Politico.
Initially drawing comparisons to J.P. Morgan and Warren Buffett – despite the latter repeatedly expressing his skepticism of cryptocurrency – SBF now appears poised to exhibit more similarities to convicted fraudster Elizabeth Holmes.
An anonymous source familiar with the massive crypto scandal told the Wall Street Journal that the Securities and Exchange Commission and U.S. Justice Department are currently investigating FTX, also saying the SEC has been looking into the crypto exchange for months.
While there hasn’t been confirmation from the SEC or U.S. Justice Department on a current investigation, it certainly appears something is rumbling under the surface.
SBF, FTX co-founder Gary Wang and FTX Director of Engineering Nishad Singh are currently all under supervision by local authorities in the tropical tax haven of the Bahamas, where the company is headquartered, according to CoinTelegraph.
The supervision is likely in response to media reports that the three executives, along with CEO of Alameda Research Caroline Ellison, were looking to flee to Dubai. After the company filed for bankruptcy on Friday, it was rumored that SBF fled to Argentina, although he has since denied that claim.