After last week’s implosion of the cryptocurrency platform FTX, the scandal has taken down the Democratic Party’s second-largest donor after left-wing billionaire George Soros.
FTX’s co-founder and CEO is Democrat mega-donor Sam Bankman-Fried.
The implosion of FTX saw Bankman-Fried’s net worth plummet in the biggest single-day wealth plunge for a billionaire, according to the Bloomberg Billionaires Index.
FTX declared bankruptcy on November 11 after facing a massive liquidity crunch when users rushed to pull out their money.
Bankman-Fried, who in a series of posts on Twitter apologized for the fiasco and said he was “shocked to see things unravel the way they did,” resigned as FTX chief executive on Friday.
Just five days prior to Friday’s FTX meltdown, Bankman-Fried was estimated to have had a net worth of $15.6 billion, according to the Bloomberg Billionaires Index.
By Friday, his net worth had shrunk to around $1 billion, with the 94 percent loss representing the biggest one-day collapse by a billionaire ever, according to Bloomberg.
Besides being widely touted as a crypto wunderkind, the 30-year-old Bankman-Fried had pledged to keep only a sliver of his vast wealth and give the rest away to various causes.
“You pretty quickly run out of really effective ways to make yourself happier by spending money,” Bankman-Fried told Bloomberg in an interview in April. “I don’t want a yacht.”
He was also a Democrat mega-donor.
Bankman-Fried donated a total of $39.8 million to Democrats, making him the biggest Democrat donor behind financier George Soros and his $128 million mega-tally, according to Open Secrets.
The FTX founder was a major donor to President Joe Biden’s campaign in 2020 and was the main donor to the Protect Our Future PAC, which endorsed a number of Democrat candidates.
At one point, Bankman-Fried said he had big ambitions for his crypto platform, telling Bloomberg he wanted it “to become the biggest source of financial transactions in the world.”
Once valued at $32 billion, FTX was seen as one of the more stable players in the loosely regulated crypto industry.
But by Friday, FTX had filed for Chapter 11 bankruptcy protection after a last-minute tentative deal with Binance for a rescue buyout fell through.
A day prior, Bankman-Fried admitted that he had “[expletive] up” and said he was “sorry” for a number of missteps managing the crypto platform.
Still, he held out hope that his successor as CEO at FTX, John J. Ray III, would manage to shepherd the company through the turbulence of bankruptcy proceedings and find a way to “recover.”
On the same day that FTX filed for bankruptcy, the crypto exchange was probing a potential hack and “unauthorized transactions,” according to Ryne Miller, the general counsel of one of its subsidiaries FTX US.
According to Elliptic, a blockchain analysis provider, it appeared that over $400 million in crypto had been stolen from FTX.
“Although unconfirmed, there are initial indications that $473 million in crypto assets were stolen from FTX late last night,” Elliptic said in a statement.
“The stablecoins and other tokens are being rapidly converted to ETH on decentralized exchanges—a common technique used by hackers in order to prevent their haul being seized,” the company added.
Miller said in a separate statement that FTX was investigating “abnormalities with wallet movements related to the consolidation of FTX balances across exchanges,” adding that more information about the incident would be forthcoming.