He willingly showed up in shorts, T-shirt, white socks, and sneakers to welcome Bill Clinton and Tony Blair on stage during a private conference organized in April 2022 by his company FTX. In his look as in his speeches, Sam Bankman-Fried cultivates a certain non-conformism, far from the cliché of a 30-year-old multi-millionaire who built his fortune on cryptocurrencies in less than four years.
Still little known to the general public, the young man has been a listened-to and respected star in the world of cryptocurrencies for a few years now. He is now establishing himself as one of the key players in the financing of a sector amid a liquidity crisis and the main architect of the consolidation movement underway.
Through the US subsidiary of his company FTX, he has optioned the decentralized lending platform BlockFi for $240 million, after granting it a revolving credit line. His other company, Alameda Research, had lent $485 million to Canadian platform Voyager Digital, which just filed for bankruptcy.
“I feel we have a responsibility to step in and stop the contagion, even if it's a huge loss for us,” Sam Bankman said in June 2022. In early July 2022, Sam Bankman-Fried told Reuters he still had “a few billion dollars” in reserve to help other struggling crypto companies.
Sam Bankman-Fried made FTX a phenomenal success
FTX has had better liquidity management and has the cash flow to support these businesses. It benefits from the consolidation of the sector. Risk management was mastered thanks to his experience as a high-frequency trader, with a career that began in the company Jane Street Capital, after studying physics at the Massachusetts Institute of Technology. It was through this door that he swung into the world of cryptocurrencies. “I initially got involved without any idea of what a Blockchain was. I was just doing arbitrage,” he confided to the Financial Times in May 2022.
In 2017, when cryptocurrencies were in a bull market cycle, he made a lot of money and in October founded his first company, Alameda Research, to take advantage of arbitrage opportunities in cryptocurrencies. In 2018, as the market entered a crypto winter after the fall of Bitcoin, Alameda Research continues to make money. Sam Bankman-Fried and his team are simultaneously developing a pioneering crypto derivatives trading platform: this will be FTX, launched in May 2019.
The platform is a phenomenal success, taking advantage of the new crypto bull cycle and the arrival of institutional investors in this new market. In July 2021, FTX makes a name for itself with a $900 million raise from around 60 investors including Softbank, Sequoia, and BlackRock, valuing it at $18 billion. It raised an additional $420 million less than four months later for a valuation of $25 billion.
At the same time, the company accelerated its efforts to promote the FTX brand in the United States and increase the number of users. It signed a partnership with the NBA for the Miami Heat's arena, which became the FTX Arena, and the star couple Tom Brady and Gisele Bündchen became brand ambassadors. It also aired a multi-million dollar ad during the Super Bowl.
Sam Bankman-Fried has the ear of American politicians
In addition to its brand awareness, FTX wants to grow its scope of activities and services both in the crypto ecosystem and outside of it. FTX has already stated its ambition to accelerate into traditional finance.
Equities, futures, index funds (ETFs) ... Sam Bankman-Fried has also taken a 7.6% stake in the popular stock-buying app Robinhood which could help him accelerate in this segment. "Our market share has grown significantly since the start of the first round of funding, the acquisitions could help the company expand its product line more quickly," explained the man now known by the three letters in his name "SBF." The list of his purchases is growing.
Entering Time magazine's top 100 most influential people of 2022, Sam Bankman-Fried has become one of the best-known public figures in cryptocurrency, much listened to by regulators ... and politicians. In 2020, he was one of the top five donors to Joe Biden's last campaign.
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