In a few years, the founder of the FTX exchange platform has become one of the most influential people in the crypto ecosystem and Web3.
With his curly hair, good face and shorts, Sam Bankman-Fried (SBF) doesn’t necessarily have the business face. However, the thirty-year-old has become in a few years an essential figure in the world of cryptocurrencies. After all, he is one of the few billionaires in this sector.
The son of two Stanford law professors, SBF was born well and has always been well-rounded. With a degree in physical sciences from MIT, after working in finance, he also quickly returned to the doctrine of effective altruism, which still dictates his life today. His purpose? Find the best possible ways to help as many people as possible.
If SBF’s main achievement is the creation of the first crypto platform dedicated to derivatives, FTX, its fame goes far beyond its own company. Indeed, its marketing is innovative and effective, it is very present on social networks and has never hidden its appetite for politics. How far will he go?
Empire Building by Sam Bankman-Fried
Alameda Research, SBF’s opportunistic investment fund
Prior to founding FTX, Sam Bankman-Fried founded Alameda Research in 2017. Based in California, it was originally an investment firm where SBF used its financial skills. During his young career, he specialized in negotiationsETFs, these exchange-traded index funds. However, SBF will quickly turn to other assets.
Like others, he sees cryptocurrencies as the future of payments and finance. SBF decides very quickly that Alameda Research will focus exclusively on cryptocurrencies. An idea will then allow its CEO to make a fortune.
Japan is a pioneering country in the field of crypto, including the rise and fall of the exchange platform Gox Mountain in 2014. Since the price of BTC is not regulated, any platform can offer its price according to certain criteria. However, if the differences are a few cents or dollars between the major Western platforms, SBF notes from 2019 that it is 10% between Japan and the United States! An opportunity Bankman-Fried will not miss.
Alameda buys BTC in the United States to resell it for a higher price in Japan, allowing him to prevent making a profit doing nothing or very little. However, his ingenuity was quickly noticed by the exchange platforms of the moment, and American banks began to block the transfers. But it’s still $20 million raised in three weeks!
FTX, the start of SBF’s global conquest
In 2018, Sam Bankman-Fried attends a conference in Macau dedicated to cryptocurrencies. A great start for the founder of Alameda Research. Indeed, due to his bulimia at work, SBF sleeps in his office and has no social life. His life descends on the Berkeley campus.
Bankman-Fried then meets many players in the ecosystem. A breath of fresh air for him… and a nest of possibilities. After the conference, he decided to move his business to Hong Kong to save money. However, it is another project that he now has in mind. SBF then delegates the management of Alameda Research to its colleagues.
Sam Bankman-Fried starts from personal observation that time exchange platforms did not offer all possible functionalities. He then notes that investing in derivatives (leverage, margin, short…) are almost absent in crypto transactions. In other words, these assets may not be of interest to traders. As a result, in 2019, he founded FTX, a platform specialized in derivatives trading.
Due to restrictive US legislation regarding these products, SBF decides to establish FTX in the Bahamas. US users access the US affiliate, FTX.US. Very soon, the platform had tremendous success all over the world and the entrepreneur succeeded in his goal: to attract traders. SBF’s fate was also that of the investment boom at the end of the first close in the spring of 2020, which enabled it to generate millions of profits in a few weeks.
Sam Bankman-Fried, prominent investor and trader
Effective branding and sponsorship marketing
However, Sam Bankman-Fried can’t be this powerful just because of FTX. What SBF realized is that cryptos need to go beyond the small world of Web3. In other words, you need to conquer the media world through marketing and sponsorship. And in this, SBF beat everyone else.
In the spring of 2021, FTX delivers a blow. or deal between the Miami Heat NBA franchise and FTX renames the basketball hall to FTX Arena for a period of 19 years and an amount of 135 million dollars! Again, this is the first time the crypto world has been exported in this way and FTX will be copied from Crypto.com (Staples Center in Los Angeles).
The success achieved by naming the Heat room gives SBF ideas. In a few months, FTX became prominently one of the main sponsors of the American League of Baseball (MLB) and the Mercedes Formula 1 team. Finally, FTX collaborates directly with personalities such as NBA player Stephen Curry and actor Tom Brady.
All these partnerships have allowed FTX to overcome the rather closed ecosystem of Web3 and become known by many sectors of activity. It is then that the effective altruism of the SBF reappears.
A genuine desire to help the ecosystem or even more
Heavily influenced by the philosopher Peter Singer, SBF places great importance on philanthropy. Give, yes, but not at any price and with the objective that these donations really serve a purpose.
Bankman-Fried created FTX Foundation to enable funding of philanthropic or research projects. There is even one list of domains which are of particular interest to SBF. However, he went further this year, claiming to be the savior of the ecosystem.
First, FTX bought the assets of the American platform Voyager Digital for more than one billion dollars. Above all, the company does not rule out redeem those of Celsiusmaking it possible to release the money of customers who do not have no access since last May.
These examples are typical of effective altruism. There is a genuine desire to help, but there must be an interest in the person helping. However, wanting to be the savior of bankrupt crypto companies, SBF will have the image of a do-gooder who can be relied on.
How far will Sam Bankman-Fried go? American media reports that he would be ready donate $1 billion in the context of the 2024 presidential election. Although he would have retired by then, it gives a glimpse of his ambitions.