Cryptocurrency is a volatile industry, and many have made fortunes from it. But with such huge potential for wealth comes the risk of losing it all just as quickly.
In this piece, we take a look at some crypto billionaires who rose to great heights only to fall even harder. Their stories prove that when it comes to cryptocurrency investing, there’s no 100% guarantee of success—no matter how much money you start off with.
1. Sam Bankman-Fried
Topping this list is the infamous Sam Bankman-Fried, also referred to as SBF in the crypto circle. Before the age of 30, this guy was already running FTX, which was the world’s fourth-largest crypto exchange in terms of trade volume. He was also the CEO of the crypto trading firm Alameda Research.
As of last year, SBF was the second-richest crypto guy. He amassed an estimated net worth of $24 billion before everything went crashing down, leaving him with zero as the year came to a close.
FTX was found to have liquidity issues in November 2022 when a large chunk of its customers made simultaneous withdrawals following Binance’s announcement of the sale of its remaining FTT (FTX’s native coin) reserves. The company, together with its liquidity provider Alameda, declared bankruptcy soon after to the surprise of many.
In the aftermath of the fiasco, SBF, together with some key executives of his firms were slapped with a series of fraud and money laundering charges. Luckily, he managed to post a hefty bail following his arrest in the Bahamas in December 2022.
2. Gary Wang
Gary Wang served as the co-founder and chief technology officer of FTX as well as the co-CEO of Alameda before both firms got burned to the ground. He experienced a catastrophic plummet in his $5.9 billion net worth due to his participation in the ill-fated FTX scam.
Wang subsequently pleaded guilty to taking part in SBF’s unscrupulous dealings and is now cooperating as a state witness.
3. Barry Silbert
Barry Silbert was the founder and CEO of Digital Currency Group (DCG), a conglomerate consisting of five crypto companies. He went from $3.2 billion to nothing when Genesis, the conglomerate’s crypto lending group, filed for bankruptcy following the mismanagement of its funds and failure to pay its creditors.
The former billionaire is also facing charges filed by the US Securities and Exchange Commission (SEC). The allegations stemmed from his illegal sale of crypto assets to investors.
The stories of these crypto billionaires who lost it all are cautionary tales that remind us to always be wary when investing in cryptocurrency. Not only is the market highly volatile, but there’s also a risk of fraud and mismanagement at any given time.
Education and research should be done before taking part in any kind of cryptocurrency investment—and even then, one must stay vigilant if one wants to protect his/her hard-earned money from disappearing overnight. Investing wisely can help you reap great rewards. However, as we’ve seen here, sometimes no amount of preparation can guarantee success if you have either participated or fallen prey to crooked crypto dealings.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager for a consultancy firm.