Crypto billionaire Sam Bankman-Fried, the CEO of the crypto exchange FTX, lost almost 16 billion euros of his assets in one day: the largest crypto loss ever. That happened after he was forced to sell FTX to his competitor Binance. The American authorities are now investigating whether customer funds have been handled correctly in the troubled FTX.
Sam Bankman-Fried, the CEO of the crypto trading platform FTX, had a net worth of almost 16 billion euros earlier this week. However, after FTX’s liquidation problems and a sale to Binance, he saw his fortune dwindle. Suddenly, his net worth was only $1 billion. It is the largest crypto loss in one day.
FTX suddenly faced liquidity problems this week and closed a deal with competitor Binance to be acquired. That was remarkable because Binance itself had contributed to the demise of FTX. Binance said it wanted to sell all of the FTX crypto coins it owns due to FTX’s money problems and fears that those coins would become worthless.
Question marks on takeover
Moreover, there are more and more questions about the acquisition deal. This offers Binance the opportunity to still cancel the deal. Sources around that company tell Bloomberg news agency that the chance of that scenario is increasing. Research would indicate that the debt-to-assets gap at FTX is likely to be billions of dollars. It may be more than $6 billion.
The investigation could take up to 30 days. Binance executive Patrick Hillman told the American news channel Fox Business that his company has only just started the investigation and will only make a decision afterwards.
value of bitcoin
In the meantime, the uncertainty caused the prices of various cryptocurrencies to tumble. Bitcoin had already lost nearly 15 percent of its value on Tuesday, falling below $17,500. A day later, there were a few more percentages that dropped to under $17,000. Bitcoin has fallen in value by almost a fifth this week.
It is not only the uncertainty caused by yet another scandal that deters crypto investors. Concerns about too much market concentration also play a role in this. If Binance actually takes over FTX, that party will become a very big player. One of the underlying ideas of cryptocurrencies is precisely the decentralized structure in which no single party is given much power.
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