KUALA LUMPUR (Dec 25): The beleaguered cryptocurrency industry and its wealthy pioneers have faced a moment of reckoning after the collapse of crypto exchange FTX and hedge fund Alameda Research, according to Forbes.

In a report on Saturday (Dec 24), the magazine said that in January 2022, Sam Bankman-Fried was riding high.

His Bahamas-based FTX had just raised US$400 million (RM1.77 billion) from prominent venture capitalists at a US$32 billion valuation.

A few weeks later, when Forbes published its annual World's Billionaires list, SBF, as Bankman-Fried is known, was crypto's second-wealthiest person, worth US$24 billion.

Now, SBF is likely broke, and awaiting trial.

Before he was arrested in the Bahamas, SBF told several media outlets his bank account was down to US$100,000, and that he was "not sure" how he would pay his lawyers.

Gary Wang, FTX's other co-founder and the company's former chief technology officer, who entered a plea deal with the US Securities and Exchange Commission, has also seen his fortune, once estimated at US$5.9 billion, wiped.

Forbes said FTX's demise was a fitting end to a year of wealth destruction in the cryptocurrency and blockchain sector.

It said the post-pandemic economic shock, which triggered inflation and rising interest rates, sucked capital out of the speculative crypto ecosystem.

As a result, 17 of crypto's wealthiest investors and founders have collectively lost an estimated US$116 billion in personal wealth since March, according to Forbes' estimates.

Fifteen of them have lost more than half their fortune over the past nine months, while 10 have lost their billionaire status altogether.