What happened to FXT CEO Sam Bankman-Fried? In need of a simple and secure crypto entry point? Larry David isn’t, at least not in FTX’s popular Super Bowl commercial, in which the infamously bitter comic disparages some of the greatest inventions in history, including the wheel, the lightbulb, and eventually FTX, the cryptocurrency exchange co-founded and led by Sam Bankman-Fried.

(The advertisement exhorts, “Don’t be like Larry.”) Bankman-Fried is the richest person in cryptocurrency, according to Forbes, with a $24.5 billion net worth, thanks to FTX’s success in making it possible for regular traders to acquire crypto-based derivatives since its founding in 2019.

FXT CEO Sam Bankman-Fried: 5 Untold Facts About Him
5 facts you should know about Sam Bankman-Fried FXT CEO

In April, Bankman-Fried sat down with Gregory Ugwi, CEO of The Business of Business’ parent company Thinknum, to talk about FTX’s success, his ideas on effective altruism, and the difficulties of operating in the cryptocurrency market.

FXT CEO Sam Bankman-Fried: Here are 5 Untold Facts About Him that we discovered throughout the interview.

1. Bankman-Fried got his start on Wall Street before going all-in on crypto

After graduating from MIT in 2014 with a degree in physics and a minor in math, Bankman-Fried started full time at Jane Street Capital, the proprietary quantitative trading firm where he had been an intern the summer before. Jane Street is known as the top Wall Street firm no one’s heard of, and much of its business comes from ETF arbitrage — a strategy Bankman-Fried would partially adopt in his first crypto venture, Alameda Research.

“I really liked it there. It’s a really good place, I had a really good time, learned a ton, and they treated me really well. After about three-and-a-half years, though, I felt like it was time to try my own thing — time to try building something and seeing how it went,” said Bankman-Fried.

What he built was Alameda Research, a quantitative trading firm like Jane Street but one that dealt in crypto. One early success was taking advantage of wide differences in crypto prices in Korea and Japan compared to the rest of the world.

“It took us a while to build up everything that we needed to do it. It took a lot of tinkering and it took a lot of building out infrastructure — some of this was technological infrastructure, but a lot of this was getting bank accounts and getting high enough withdrawal limits on our crypto accounts [in foreign countries] to be able to operate the way that we need to,” said Bankman-Fried.

2. His interest in politics doesn’t stop at crypto regulation

Bankman-Fried has been politically active in the last two years, contributing over $5.2 million to Joe Biden’s Presidential campaign in 2020 and helping to bankroll the Protect Our Future super PAC.

Aside from monetary donations, Bankman-Fried has testified before Congress about the state of crypto regulation twice in the last three months. It’s important to note that FTX, which is based in the Bahamas, makes most of its profit abroad. It has a separate, limited marketplace set up for the United States that doesn’t allow traders to access certain trading pairs and instruments.

“The basic reason is that there are different regulatory landscapes in different jurisdictions, and in particular the CFTC [the Commodity Futures Trading Commission] hasn’t come out with a comprehensive regulatory framework for crypto derivatives yet,” said Fried. “We’re optimistic that over the next five years or so there’s going to be a lot more clarity on that and we’ll be able to obtain whatever licenses end up being necessary for this.”

3. Bankman-Fried has made a splash in the sports world, too

It’s not just Super Bowl ads. After American Airlines decided not to renew its expiring naming rights to American Airlines Arena, the home of the Miami Heat, FTX snapped them up for $135 million.

“I’m super excited for that,” said Bankman-Fried.

This was the first instance of a crypto company buying the naming rights to a major stadium — the deal was later followed by Crypto.com’s renaming of L.A.’s Staples Center, now known as the Crypto.com Arena, for which the company paid a reported $700 million.

FTX also purchased the naming rights for California Memorial Stadium, now FTX Field, home of the University of California, Berkeley’s NCAA football team, the Golden Bears. FTX Field is located in Alameda County — the namesake of Alameda Research, the trading firm Bankman-Fried created.

The exchange also signed a deal with Major League Baseball to become the official crypto exchange of the league. And finally, not limiting itself to physical sports, FTX bought the naming rights to e-sports organization TSM, renaming it TSM FTX, for a cool $210 million. This all happened in 2021, just two years after FTX was created.

4. Bankman-Fried considers himself an “effective altruist”

What’s the best way to do good? That’s the question effective altruists ask themselves, often examining hard data and randomized controlled trials in order to maximize their charitable contributions. Bankman-Fried exemplifies the “earn-to-give” model of effective altruism, which holds that one should attempt to make as much money as possible in order to maximize the possibility of charitable giving.

Bankman-Fried recently estimated that he has given away $50 to $100 million to various causes so far, and FTX donates 1% of all fees collected by the platform. Alameda Research once required its employees to give away at least 50% of their salaries to effective causes, and Bankman-Fried plans to give away around 50% of his fortune too.

“It’s not obvious what the answer is — there’s lots of things you can do. Part of my goal is to figure that out, and then do that,” said Bankman-Fried.

“Part of that is looking at global health charities and thinking about which can save the most lives for the amount of money I’m going to be donating,” he said. “Part of it is thinking about which can push the world in as positive a direction [as possible], which can do the most to combat emerging risks from new, emerging technologies, especially the ones that can be the most existential for the world, or anything else that would have a big impact.”

5. Bankman-Fried’s biggest challenge launching FTX wasn’t building it or raising capital

Bankman-Fried had previously worked in proprietary trading firms that barely interfaced with the public. He told us that raising the money to start FTX wasn’t a problem, nor was building the product. Rather, it was marketing the product to its consumers, namely crypto traders, that presented the most significant hurdle.

His solution? Going user by user to figure out how to improve the platform and hoping that its reputation as a better trading platform would spread organically.

“What we ended up doing — it was a real grind, but [we were] going user by user, starting with the most engaged in the ecosystem, and reaching out to them, talking to them about FTX, and trying to get them just to give it a chance and see what they thought,” said Bankman-Fried. “[We were] reaching out to the largest traders, spending sometimes months working to onboard them,  then going by word-of-mouth where existing users were talking to other users and where the name would spread a little bit on social media and grow outwards from there.”

While FTX doesn’t have as many users as some other exchanges, such as Coinbase, it ranks first in the world in liquidity according to Cryptowatch.

“Despite being something like the fourth-biggest globally by volume, our user base is quite a bit smaller than the other exchanges because we were founded way after them — they had tens of millions of users before we even existed,” said Bankman-Fried. “Eventually [we were] starting to reach this point, which has been really cool to see, where we get big enough that people start reaching out to onboard and that people start saying ‘Obviously FTX is one of the few exchanges that I should try.’ Once you reach that point, you reach a flywheel [effect], at least for people who are engaged enough in the industry that they’re going to try multiple venues.”

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