The cryptocurrency entrepreneur who donated the second most to Democrats this election cycle just had 94% of his net worth erased as his company collapsed.
Sam Bankman-Fried, 30, known in the crypto realm as SBF, saw his company, FTX, fall apart in just days during a liquidity crunch that culminated with his rival, Changpeng Zhao’s Binance, moving in to buy the company. Now those plans are reportedly falling apart, causing bitcoin to slump to two-year lows, and Bankman-Fried’s net worth continues to plunge.
As of the Tuesday midterm elections, Bankman-Fried’s net worth had fallen from more than $15 billion to just below $1 billion, according to Bloomberg. It was the biggest-ever one-day decline among the billionaires that the company keeps track of — and it could decline further as the dust settles.
While FTX’s fall from grace is sending seismic shock waves throughout the cryptocurrency world, Bankman-Fried’s massive loss is also notable given his role in Democratic politics. He was the second biggest Democratic donor, as measured by total federal contributions in 2021-2022, according to Open Secrets.
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All told, Bankman-Fried has spent nearly $40 million on campaigns. Among those donating primarily to Democrats, he is second only to billionaire philanthropist and Republican bogeyman George Soros.
Bankman-Fried was a big driving force behind the Democratic super PAC Protect our Future, which backed candidates who it thinks have the best shot to look beyond the present and “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.
In May, Bankman-Fried predicted he would spend even more before the 2024 presidential election, guessing that he would fund “north of $100 million” in the next election with a “soft ceiling” of $1 billion.
Last month, the FTX CEO backed away from that previous assertion, tempering expectations for an even bigger spend between now and the 2024 elections.
“That was a dumb quote on my part,” he admitted to Politico. “I think my messaging was sort of sloppy and inconsistent in some cases.”
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Bitcoin and cryptocurrency across the board were in steep decline on Wednesday, with the flagship digital asset tumbling below $17,000 for the first time since November 2020.
The decline adds to the losses that bitcoin has faced all year as investors fled the markets for more traditional, and less risky, assets. At its peak almost exactly a year ago, bitcoin soared to a whopping $69,000. It has fallen by more than 75%. That is far greater than the losses that traditional stock indexes have experienced in light of soaring inflation and fears of a looming recession.
