FTX is a rising star in cryptocurrency world that was founded in 2018 and soon became one of the world’s most popular cryptocurrency exchange platforms. As of last July, the company has about $10 billion daily trading volumes serving over a million users and is valued at $18 billion. Wunderkind Sam Bankman-Fried, CEO at FTX, was recently cited by Fortune Magazine as one of the fastest self-made billionaires in history.
Bankman-Fried’s current vison is to transform FTX into a highly diversified trading platform.
He shared his plans and industry insights with Mitchell Dong, a private investor and cryptocurrency trader. Following are excerpts from the June 30, 2022, interview.
Retail investor vs. shareholder: Bankman-Fried disclosed he would prioritize protecting retail investors over original shareholders. He believes equity owners get the upside of businesses and the whole point is that you are risking your capital and willing to lose if things go poorly in return for economic upside, but if things go poorly, you accept it because that’s part of the deal. Also, he said protecting retail investors is healthy for the ecosystem.
Branding vs. Marketing: When asked why FTX partnered with Tom Brandy and Giselle in Superbowl while Coinbase has a more sales-driven commercial, from Sam’s perspective, he believes in a mix of high-level branding and targeted marketing to convert customers, noting noted that FTX has done more branding than marketing in the past.
Timing to get out of bear market: When considering catalysts that would take us out of the bear market, Bankman-Fried suggested flushing a lot of leverage out of the system when all the selling is finished. Next, would be getting more regulatory clarity. And finally, seeing more real-world use cases in crypto instead of hypothetical use cases or use cases with crappy products would be a plus.
NFT myth: Bankman-Fried believes NFTs will have a big moment when platforms adopt them.
Regulation clarity on crypto: The U.S. has made huge progress on crypto regulations. It started with some optimistic views that led to the formation of a comprehensive crypto regulatory framework. Recently, Bankman-Fried testified in a senate hearing for “Examining Digital Assets – Risks, Regulation and Innovation.”
Bigger vision: When asked about potentially tokenizing equities is the future, Bankman-Fried believes it’s more of a regulatory question. In general, FTX is moving towards equities, gaining broker dealer licenses and partnering with IEX, which now acts as a national securities exchange.
Why didn’t FTX launch in the U.S.? “FTX started as crypto derivatives and you would need DCO and DCMS. Back then, there was not much of a pathway forward for launching FTX in the United States.”
Interview with Bill Clinton: When asked about Bill Clinton’s efforts to encourage internet innovation in the U.S., and what he would do to encourage crypto blockchain innovation, Bankman-Fried said it’s not about regulation that’s good or bad; it’s more about timing and the right regulatory approaches.
Advice to young traders: Grind it out, have ambition, and try to overcome obstacles. Success has more to do with hard work than luck but has a lot to do with timing. We got into an industry
that was booming and continue to grow, Bankman-Fried stated.
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AUTHOR
Tracy Lai
FinTech Consultant, Partner at LYSTAR GROUP
Tracy Lai provides strategic and business development solutions to executives, and entrepreneur. Her professional experience includes work at Fortune 500 companies including Intel and RBS, and startups. Her expertise covers business development, risk management, project management and investor relations, in Financial Services, FinTech, Innovation, Technology and Education. As management consultant and FinTech advisor, she holds multiple senior roles with focus on cross border and cross industry collaboration, including projects in US, Asia and Europe.
