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Sam Bankman-Fried: The Rigged Wall Street System that “Valued” His Company at $32 Billion

Wall Street on Parade |  Dec.5, 2022

If you have been following the Sam Bankman-Fried and FTX crypto exchange story since the company filed for bankruptcy on November 11, you have likely read the phrase “a valuation of $32 billion” dozens of times to describe the “valuation” of FTX as recently as February of this year. (We pulled up 47,600 results from a Google search.)

But here’s the funny thing. No media outlet has bothered to explain how FTX came by that $32 billion valuation or precisely how Sam Bankman-Fried, the co-founder and CEO of FTX, became a billionaire overnight. FTX wasn’t publicly traded so its share price wasn’t determined by millions of investors buying and selling its stock on a public stock exchange five days a week.

And here’s another funny thing: mainstream media reported in late September that FTX was looking to raise $1 billion more from venture capitalists while keeping its valuation at $32 billion, the same value that it had in February. But between February 1 and September 30, Coinbase, a crypto exchange that actually did trade on a public exchange where millions of real people bought and sold its stock, had lost 67 percent of its value.

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