Crypto Platform FTX’s Implosion Hits Democrats’ 2nd Biggest Individual Donor

Sam Bankman-Fried speaks on stage at Casa Cipriani in New York on June 23, 2022. (Craig Barritt/Getty Images for CARE For Special Children )

The net worth of the founder of the crypto exchange FTX and Democrat megadonor Sam Bankman-Fried plummeted last week in what on the Bloomberg Billionaires Index was its biggest single-day wealth plunge for a billionaire.

FTX filed for bankruptcy protection on Nov. 11 after facing a massive liquidity crunch, in which users rushed to pull out their money.

Bankman-Fried, 30, who in a series of posts on Twitter apologized for the turn of events and said he was “shocked to see things unravel the way they did,” resigned as FTX chief executive on Nov. 11.

Just days prior to the FTX meltdown, Bankman-Fried was estimated to have had a net worth of $15.6 billion, according to the Bloomberg Billionaires Index.

By Nov. 11, his net worth had decreased 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 April interview. “I don’t want a yacht.”

He was also a Democrat megadonor.

Bankman-Fried has donated a total of $39.8 million to Democrats, making him the biggest Democrat individual 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 Nov. 11, 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 made a mistake 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 more than $470 million in crypto had been stolen from FTX.

“Although unconfirmed, there are initial indications that $473 million in cryptoassets were stolen from FTX late last night,” Elliptic said in a statement.

“The stablecoins and other tokens are being rapidly converted to ETH on decentralised exchanges—a common technique used by hackers in order to prevent their haul being seized.”

Miller said in a separate statement that FTX was investigating “abnormalities with wallet movements related to consolidation of ftx balances across exchanges,” adding that more information about the incident would be forthcoming.