SBF was being heralded as one of the youngest self-made millionaires in history, and was vowing to give away as much of his wealth as possible.
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This time last year, Sam Bankman-Fried was riding high on Forbes' list of the 400 richest Americans.
Propelled by a staggering bull run in the crypto markets, the FTX CEO saw his net worth peak at $26 billion last year — overtaking Rupert Murdoch and his family.
SBF was being heralded as one of the youngest self-made billionaires in history, and was vowing to give away as much of his wealth as possible.
And even despite the bearish downturn in the crypto markets over recent months, the 30-year-old was still worth about $15.6 billion.
In a blink of an eye, SBF's financial situation has changed dramatically — and according to Bloomberg, his net worth has suddenly shrunk to about $1 billion.
The news outlet says this 94% loss "is the biggest one-day collapse ever among billionaires" it has tracked — and it follows a crisis that has engulfed both FTX and Alameda Research.
'Two Big Lessons'
CZ reflected on the dramatic developments at FTX in late-night tweets on Tuesday.
He said firms in the sector should never use a token that they created as collateral, adding:
"Don't borrow if you run a crypto business. Don't use capital 'efficiently.' Have a large reserve. Binance has never used BNB for collateral, and we have never taken on debt."
A large part of the crisis engulfing FTX relates to its native token, FTT.
Last week, CoinDesk scrutinized the balance sheet of Alameda Research, FTX's sister company, and found that FTT represented most of the assets on its books.
Analyst Lyn Alden described this situation using an analogy entered on two major U.S. fast food giants:
"Imagine McDonald's makes its own money, let's call them clown-bucks, keeps most of it, and sells some to the market. McDonald's then uses their remaining clown-bucks as collateral for actual loans. And then people remember clown-bucks aren't real. And then Starbucks comes and market sells the clown-bucks they were holding, while reminding the market that clown-bucks aren't really a thing. McDonald's balance sheet is trashed, with their clown-bucks wiped out. Anyway, that's what happened in crypto-land this week."
