How Sam Bankman-Fried Went from Billionaire to Prisoner in 72 Hours!

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Ah, the perils of strong assets caught in a liquidity quagmire-what a tragicomedy!

Once upon a time, Sam Bankman-Fried was the sovereign of a kingdom that boasted riches exceeding $50 billion. Yet, as fate would have it, in the blink of an eye-specifically over the course of a mere 72 hours-the empire crumbled to dust. A horde of withdrawal requests swept through FTX like an uninvited guest at a lavish dinner party, forcing our protagonist to sell his treasures at a discount that would make even a yard sale look luxurious. Recent calculations reveal just how much value vanished into thin air, like a magician’s trick gone wrong.

Anthropic’s $380B Valuation: A Glimpse of Hope in the Ruins?

Our dear Axel Bitblaze, a keen observer of the financial circus, uncovered some delightful details from November 2022. Bankman-Fried had secured an 8% stake in Anthropic, a prized possession purchased for a paltry $500 million. He also held 58 million Solana tokens and 7.6% of Robinhood-his portfolio resembling a child’s collection of shiny marbles rather than the serious work of a seasoned investor.

SBF lost control of a $50B+ portfolio in the blink of an eye!

A genius investor? Perhaps! Let’s take a peek at his fabled investments:

• His portfolio (November 2022):

> Anthropic: 8% stake ($500M invested in 2021)> Solana: 58M tokens> Robinhood: 7.6% of company> SpaceX stake through…

– Axel Bitblaze 🪓 (@Axel_bitblaze69)

This week, Anthropic managed to raise capital at a staggering valuation of $380 billion. Lo and behold, that 8% stake now glimmers with the potential worth of around $30.4 billion. The Solana tokens, trading at near $180, could fetch approximately $10.4 billion. Our friend Robinhood, with a market cap hovering near $50 billion, makes Bankman-Fried’s 7.6% holding worth about $3.8 billion. And let us not forget the other private positions that could add at least $5 billion more to this financial fairy tale.

In total, these assets might approach or even surpass the enchanting $50 billion mark, should the stars align. Market watchers are scratching their heads over the impeccable timing of his selections, particularly the early investment in Anthropic. Back in 2021, while most crypto firms were busy chasing rainbows, a few had the foresight to dabble in artificial intelligence. Anthropic has since become one of the brightest stars in the AI constellation.

The Bank Run: A Tragic Revelation of FTX’s Fragile Foundation

But alas! Strong picks alone do not a fortune make. FTX’s downfall stemmed from a fundamental mismatch: long-term assets in a world where customers clamored for swift access to their funds.

  • Venture stakes required months to exit-a slow dance in a fast-paced world.
  • Large token holdings risked plummeting prices if sold in haste, like trying to catch a greased pig.
  • Real estate and minority equity stakes seemed to vanish into a void devoid of secondary markets.
  • Meanwhile, customer deposits demanded the immediacy of a fast-food order during a lunch rush.

The pressure cooker began to hiss on November 2, 2022, when CoinDesk unveiled the secrets of Alameda Research’s balance sheet. Just four days later, Binance‘s CEO Changpeng Zhao decided to sell his FTT holdings, setting off a frenzy of withdrawal requests amounting to about $6 billion in a mere two days. By November 8, FTX had no choice but to halt withdrawals, and by November 11, the curtain fell with bankruptcy, leaving Bankman-Fried to take his final bow.

Illiquid positions failed to transform into cash quickly enough, much like trying to squeeze orange juice from a stone. Selling an 8% stake in Anthropic in a single afternoon was an impossible dream. Offloading 58 million Solana tokens would have sent the market price spiraling downwards faster than a falling star. Once the bank run commenced, balance sheet logic became as useful as a chocolate teapot.

Court filings revealed that FTX eventually sold Anthropic shares for roughly $1.3 billion. At current valuations, those shares could be worth more than $30 billion. Meanwhile, Solana tokens exchanged hands at about $64 each-far below their previous heights. Total recoveries reached around $18 billion, a far cry from the estimated $50 billion or more had circumstances been more favorable.

As of November 2023, a jury found Bankman-Fried guilty on seven counts of fraud and conspiracy. Prosecutors argued that customer funds mingled with those of Alameda Research, creating an $11 billion gap. The once-mighty FTX chief now serves a 25-year sentence, a fitting conclusion to a ludicrous tale.

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2026-02-15 03:24