Most Influential 2021: Sam Bankman-Fried


He would possibly now be a billionaire, however Samuel Bankman-Fried, or “SBF,” nonetheless has that wild puff of hair. It’s hair that screams just-rolled-out-of-bed. Or a beanbag chair. “I’m up to something like 50%, in terms of sleeping on beds,” SBF tells CoinDesk.

The 50% is an enormous deal. And beds have been as soon as a luxurious that SBF couldn’t afford. Only a 12 months in the past, the previous dealer spent most nights sleeping underneath his desk, in Hong Kong, whereas launching a then-obscure buying and selling agency. (I referred to as him as soon as at 3:30 a.m. Hong Kong time. He was on the workplace and fortunately took my name.) Most Americans had by no means heard of FTX. Even most bitcoiners had by no means heard of FTX, an change that – on the time – targeted on skilled buying and selling instruments like derivatives.

This submit is a part of CoinDesk’s Most Influential 2021 sequence. Pindar Van Arman’s NFT portrait of Sam Bankman-Fried is out there at SuperRare.

Fast ahead one 12 months.

The Miami Heat now play within the FTX Arena. Tom Brady and Gisele Bündchen star in FTX commercials. During the World Series, you couldn’t miss the FTX indicators behind residence plate, the numerous FTX commercials, or the FTX patches on the umpire uniforms. FTX turned “the official cryptocurrency exchange of MLB,” as if baseball has used a crypto change for the reason that days of Mickey Mantle.

Flush off a $420 million spherical of fundraising, FTX is now price an estimated $25 billion, and Bankman-Fried – not but 30 – is likely one of the richest and strongest individuals on the planet.

This doesn’t appear to have modified the person. He nonetheless eats “when it seems appropriate for the given day,” which typically means 3 p.m., typically 3a.m. He stays a vegan for humanitarian causes (“it’s all for animal welfare”) and he nonetheless reaches for his beloved Oreos, “one of nature’s more surprising vegan foods.”

And he’s laser-focused on regulation. Earlier within the 12 months, SBF spent 5 hours a day personally coping with regulatory points, and he expects regulation to loom over 2022. “It’s a messy world, and there are 195 countries out there,” Bankman-Friedman says. “Each one is separately exploring what their regulatory framework will look like. We’re trying to stay abreast of all of them.” Regulation is what drove FTX to maneuver its headquarters from Hong Kong to the Bahamas, because the islands “have a comprehensive regulatory framework for crypto, and very few countries have that.”

Bankman-Friedman sees over-regulation as the largest threat to bitcoin. He views a “hard ban” as unlikely, however acknowledges threat in a “soft ban,” resembling China’s method. “If we saw coordinated action of restricting access to cryptocurrency projects in the United States and the European Union, that could have a materially bad impact on the market,” says the CEO.

As for regulation in 2022? SBF predicts there’ll “almost certainly” be some kind of stablecoin regulation, as there’s “a lot of noise around it, and there’s a lot of will for it,” resembling periodic audits of what’s backing the tokens. This might have benefit. Like the Winklevoss twins, SBF views regulation within the U.S. as inevitable and even helpful, telling CNN that “the strongest version of the crypto industry is one that does have regulatory oversight.”

Some dangers to bitcoin, Bankman-Friedman says, have already change into much less regarding. Exhibit A: the chance of institutional buyers fleeing the market. He finds it helpful to check the state of bitcoin as we speak, on the finish of 2021, to bitcoin on the finish of 2017. “Going into 2018, there was an enormous amount of excitement,” SBF says, as “institutions worldwide were actively trying to decide whether or not to get involved.” Then got here the crash. These crypto-curious establishments felt that they had dodged a bullet, and so they remained on the sidelines. The value of bitcoin languished.

“It ended up taking another two or three years for a number of them to get in,” SBF says. He imagines that if there had been a crash in the summertime of 2020, maybe that may have dissuaded massive establishments from getting into crypto. But now they’re in. The die is forged. “At this point, I think many of them are more committed to it now than they were,” says SBF, and he expects extra to hitch the celebration in 2022. “It would take substantially more negative effects to halt that momentum.”

I used to be curious what the “negative effects” might imply for FTX itself, notably given its large enlargement. To the skin eye, evidently FTX spent like a drunken sailor on the promoting spree. And this occurred throughout a throbbing bull run, the place everybody appears to be like like a genius. What would occur to FTX if, say, the value of bitcoin plummets?

SBF isn’t dropping sleep over this, or a minimum of any extra sleep than ordinary. First, and amazingly, he says FTX’s whole endorsement and partnership finances accounts for lower than 10% of 2021 income, so it’s “not a huge hit on that front.” If bitcoin crashed to $20k, theoretically, SBF would anticipate long-term income (“or at least medium-term revenue”) to endure, however “I would be shocked if it went down to a point where we were no longer profitable.” And even when bitcoin enters a cold bear market, that recent spherical of $420 million offers FTX “a pretty decent firewall of money.” And that firewall might quickly change into much more “decent”; current studies point out that FTX is seeking to increase a complete of $1.5 billion at a possible valuation of $32 billion.

Sam Bankman-Fried, co-founder and chief executive officer of FTX, in Hong Kong, China, on Tuesday, May 11, 2021. FTX, the digital-assets trading platform launched two years ago by Bankman-Fried, said it handled enough volume last month to make it one of the largest crypto exchanges. Photographer: Lam Yik/Bloomberg via Getty Images

The son of Stanford legislation professors, SBF is a longtime follower of “effective altruism.” That is, making an attempt to make as a lot cash as doable so he can then donate funds in a manner that optimizes its affect. In 2020, he carried out a tough calculus and decided that his cash might serve the best good with one easy perform: besides Trump from the White House. His $5 million donation to the Biden marketing campaign – (he’s one of many largest donors) – is uncommon within the libertarian-heavy world of crypto.

“I have given to some Republicans, I’ve given to some Democrats,” SBF says diplomatically, then instantly clarifies that “I’ve given more to Democrats at this point.” He cares extra about coverage than celebration fealty. SBF appeared appalled, for instance, by the Democrats’ proposed tax on billionaires, telling The New York Times DealBook, “I think this could cause hugely negative collateral damage, significantly reducing the amount of innovation and taxable base in the first place.”

As for 2024? “It’s hard for me to have a great prediction of that, without knowing who the candidates are going to end up being,” which, deliberately or not, is an virtually hilarious low-key swipe at President Biden.

Besides, 2024 is a lifetime away, particularly in crypto-years. By then we’ll be celebrating New Year’s Eve in midtown New York on the FTX Times Square, we’ll purchase our vacation presents utilizing the FTX money app, and little youngsters will hope that Santa brings them presents from the FTX North Pole.

This is all in play. The solely secure wager is that SBF nonetheless gained’t have combed his hair.