Sam Bankman-Fried is the founder of the FTX exchange and has become the world’s richest under-30 thanks to crypto. Bankman-Fried was introduced to Bitcoin only 4 years ago.
Sam Bankman-Fried: the world’s richest man under 30 thanks to crypto
Forbes told the full story of Sam Bankman-Fried, the guy who entered the list of the world’s richest men in 32nd place with a total wealth of $26 billion thanks to cryptocurrencies.
Not only that, at the time of writing, Bankman-Fried is also the first under-30 richest person in the world.
Indeed, it is his crypto-exchange FTX, with a valuation of up to $18 billion that accounts for his success. Incredible when considering that Bankman-Fried only became acquainted with Bitcoin and the crypto market four years ago.
FTX reportedly handles about 10% of the $3.4 trillion in derivatives traded by crypto traders each month and collects an average of 0.02% on each transaction. Percentages that created a $350 million profit on $750 million in total revenue in just 12 months.
Dedicated to a more sophisticated niche of investors who want to trade derivatives such as BTC options or ETH futures, FTX has become the meeting place and exchange for all those traders who trade more frequently and for larger amounts than the average crypto-investor.
History and philosophy on charity
A bit like the story from Robert Kiyosaki’s famous book “Rich Father Poor Father”, Bankman-Fired is the son of two Stanford law professors who, after a degree in physics from the Massachusetts Institute of Technology (MIT) in 2014, abandoned the idea of becoming a professor to build one of the world’s largest fortunes.
Embracing utilitarian philosophy, he noticed a strong attraction to effective altruism, the kind that claims to do as much good as possible based on the available evidence and the region. A form of charity that moves away from fashion or personal issues.
Hence, Bankman-Fired’s entry into finance, with a well-paid first position in which he traded ETFs, and for which he donated part of his salary towards philanthropic causes.
It wasn’t until 2017, when Bitcoin was in the midst of its rally that saw it reach almost $20,000, that Bankman-Fried cultivated the idea of buying BTC in the US to sell it in Japan, at a 30% higher price.
Around that time he launched Alameda research, a quantitative trading firm, initially working in arbitrage, and moving up to $25 million in bitcoin per day as early as January 2018. In 2019, with part of Alameda’s profits, Bankman-Fried founded FTX in Hong Kong, moving the entire headquarters to the Bahamas in September 2020.
In just 2 years of existence, FTX has achieved daily derivatives trading volumes of $11.5 billion, becoming the fourth largest derivatives crypto-exchange after Bybit, OKEx and Binance.
At the time of writing, Bankman-Fried has only allocated $25 million to charity for a variety of causes such as the right to vote, global poverty alleviation, and artificial intelligence security. In this regard, he commented:
“There’s a lot of work to be done. Major giving is not a short-term goal. It’s a long-term one”.
The success of FTX
The strategy of serving a more derivatives-focused niche of crypto investors has resulted in FTX developing record volumes in a very short time. This achievement has come under the spotlight of major investors in the industry and beyond, who together trust Bankman-Fried’s work.
Last July alone, FTX raised $900 million in a funding round that included Coinbase Ventures and SoftBank.
Not only that, the global motor giant Mercedes also chose FTX as its official partner last month. More specifically, it is a multi-season collaboration that will see FTX’s logo featured on Mercedes AMG Petronas F1 Team cars, drivers’ suits and teams.
Other celebrities such as football player Tom Brady and his model girlfriend Gisele Bündchen have also partnered with the crypto exchange, buying shares.
But stepping back to the beginnings of FTX, in 2019, one of the crypto derivatives exchange’s strategic investors was Binance itself.
An unexpected move by offering Binance itself derivatives trading, but one that nonetheless saw it participate in FTX by buying shares and taking a long-term position on FTX’s token (FTT), as a contribution to the sustainable growth of its ecosystem.