Recently, Sam Bankman-Fried (aka “SBF”) shared his experience of co-founding the popular crypto exchange FTX and growing it to a $32 billion valuation in just three years.
Speaking in an interview with Insider, SBF revealed that he decided to found his own crypto exchange in 2019 after growing annoyed with using what he called “crappy” platforms. The 29-year-old, worth $24.5 billion by Forbes most recent estimate, has become one of the most recognizable figures in the crypto industry.
FTX, based out of the Bahamas, was able to raise $400 million from heavy-hitter investment firms such as Softbank and Tiger Global, bringing its valuation last month to $32 billion. The report claims the exchange is now worth more than Twitter, the stock-exchange giant Nasdaq and Germany’s Deutsche Bank–after being founded only three years ago.
SBF, who graduated from MIT with a degree in physics, started his career working for the Wall Street firm Jane Street. He went on to co-found crypto-trading firm Alameda Research in 2017, exploiting price discrepancies across global markets.
In 2018, SBF grew frustrated with the utility of existing crypto exchanges, saying they were glitchy and unsafe, with poor customer support.
You felt like, these are really central, important, valuable systems, which are really crappy right now, and we can do better than this.
SBF went on to co-found FTX with Gary Wang, a fellow MIT grad and ex-Google software engineer. The exchange saw an explosion in activity in 2021, ending the year with 5 million users and a daily volume peak of $60 billion.
SBF said the key to FTX’s success was having extremely rare crashes, offering users complex crypto derivatives and having a policy of only one trading account in which margin balances offset.
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