Sam Bankman-Fried had a net worth of $32 billion earlier this year.
Venture capital firm Sequoia Capital is going to cut down its investment in cyptocurrency exchange firm FTX to zero from over $210 million as bankruptcy looms over the Sam Bankman-Fried led firm, the company announced today, just months after showering heavy praise on ‘SBF’.
In an article published by Sequoia, a historian had asked a partner at the firm whether she feels the FTX founder had a chance at becoming the world’s first trillionaire. Michelle Bailhe, who knew SBF and his firm well, had then quipped: “I think he has a real chance at that.”
The author of the article also wrote: “SBF has a net worth, as estimated by Forbes, that’s higher than the vast majority (80 percent) of the world’s billionaires—and, yet, he’s only gotten started. FTX is a company in its infancy.” Just earlier this year, SBF had a net worth of $32 billion. He is only 30.
And now as the tables have turned, that article has been updated with a note.
“Since this article was published, a liquidity crunch has created solvency risk for FTX and its future is uncertain. Many have been affected by this unexpected turn of events. For Sequoia, our fiduciary responsibility is to our LPs. To that end, we shared this letter with them today regarding our investment in FTX. For FTX, we believe its fiduciary responsibility is first to its customers, and second to its shareholders. As such, FTX is exploring all opportunities to ensure its customers are able to recover their funds as quickly as possible,” the note at the beginning of the article that puts the spotlight on SBF now says.
Helios Capital founder Samir Arora too took a dig at the recent change of events. Sharing the article and quoting the trillionaire comment, Arora tweeted: “Phenko to lambi phenko latest entry (If you bluff, bluff big latest entry).
And now the same company is likely filing for bankruptcy. Sequoia has pulled out and Binance, the world's largest cryptocurrency exchange, has backed out of a bailout agreement with FTX, its once rival.
Just two days ago, reserves for FTX stablecoins hit their lowest level in a year and people started withdrawing funds despite SBF’s appeals to calm markets by telling investors that their money is safe. Binance came to the rescue a day later but pulled out of the deal after due diligence claiming that FTX is reportedly under investigation by a US government agency for how it handles customer funds.
Sam Bankman-Fried established Alameda Research, a private trading and venture capital firm specialising on digital assets in 2017. Two years later, he co-founded FTX with Gary Wang. Alameda Research incubated FTX and had back then received funding from Binance. In July 2021, Binance said that it was selling its share of FTX. The exit happened when FTX raised $900 million that year.
