THE CROESUS OF CRYPTO
Forbes Indonesia|November 2021
FTX COFOUNDER SAM BANKMAN-FRIED BUILT A $22.5 BILLION FORTUNE BEFORE HIS 30TH BIRTHDAY BY PROFITING OFF THE CRYPTOCURRENCY FRENZY—BUT HE’S NOT A TRUE BELIEVER. HE JUST WANTS HIS WEALTH TO SURVIVE LONG ENOUGH TO GIVE IT ALL AWAY.
STEVEN EHRLICH AND CHASE PETERSON-WITHORN
It’s a hazy late-summer evening when Sam Bankman-Fried drifts into Electric Lemon, a “clean, conscious” eatery on the 24th floor of the five-star Equinox Hotel in Manhattan’s Hudson Yards complex. The 29-year-old cryptocurrency billionaire has jetted in from Hong Kong in part to cohost this private party but nonetheless tries to slink to the corner of the room unnoticed.

His standard attire—black hoodie, gray khaki shorts, beat-up New Balances—might be camouflage on the streets below, but in this sea of cufflinks and cocktail dresses he stands out even more than 6-foot-9 Obi Toppin, the New York Knicks power forward who’s mingling with the crowd. It doesn’t take long before Bankman-Fried is mobbed: Can I pitch you something? What do you think about the latest crypto crash? How about a photo for Instagram?

It’s all part of the job for the richest twentysomething in the world. Bankman-Fried’s cryptocurrency exchange, FTX, which enables traders to buy and sell digital assets such as bitcoin and Ethereum, raised $900 million from the likes of Coinbase Ventures and SoftBank in July at an $18 billion valuation. It handles some 10% of the $3.4 trillion face value of derivatives (mostly futures and options) traded by crypto investors each month. FTX pockets 0.02% of each of those trades on average, good for around $750 million in nearly risk-free revenue—and $350 million in profit—over the last 12 months. Separately, his trading firm, Alameda Research, booked $1 billion in profit last year making well-timed trades of its own. Lately Bankman-Fried has been hitting the TV circuit to opine on bitcoin prices, regulations and the future of digital assets.

“It’s a really weird, awkward in-between time for the industry,” he says. “There’s just a lot of uncertainty in half the countries in the world.”

Four years ago, Bankman-Fried had yet to buy a single bitcoin. Now, five months shy of his 30th birthday, he debuts on this year’s Forbes 400 at No. 32, with a net worth of $22.5 billion. Save for Mark Zuckerberg, no one in history has ever gotten so rich so young. The irony? BankmanFried is no crypto evangelist. He’s barely even a believer. He’s a mercenary, dedicated to making as much money as possible (he doesn’t really care how) solely so he can give it away (he doesn’t really know to whom, or when).

Steve Jobs obsessed over his sleek and simple products. Elon Musk claims he’s in business to save humanity. Not Bankman-Fried, whose philosophy of “earning to give” drove him into the crypto gold rush, first as a trader, then as the creator of an exchange, simply because he knew he could get rich. Asked if he would abandon crypto if he thought he could pile up more money doing something else—say, trading orange juice futures—he doesn’t even pause: “I would, yeah.”

At the moment, Bankman-Fried’s “effective altruism,” the utilitarian-inflected notion of doing the most good possible, is almost entirely theoretical. So far, he has given away just $25 million, about 0.1% of his fortune, placing him among the least charitable members of The Forbes 400. He’s betting that he’ll eventually be able to multiply his giving by a factor of at least 900 by continuing to ride the crypto wave instead of cashing out now.

“My goal is to have impact,” he says. But to get there, Bankman-Fried, who moved to Hong Kong in 2018 and to the Bahamas in September, will have to survive increasing government attention and outflank an army of competitors vying for the business of more than 220 million traders worldwide—all while braving the boom-and-bust crypto cycles that can spawn great fortunes at historic speeds yet level them just as quickly.

“He’s a phenom,” says Kevin O’Leary, star of ABC’s Shark Tank, who recently invested in FTX and is a paid spokesperson. “He’s achieved a lot so far, and he has the respect of a lot of investors—I’m one of them—but his job is just beginning.”

The son of two Stanford law professors, Sam Bankman-Fried grew up reading Harry Potter, watching the San Francisco Giants and listening to his parents talk politics with West Coast academics. After graduating from a small private Bay Area high school that, he says, “would have been really great if I were more hippie-ish and liked science less,” he enrolled at MIT, where he “half-assed” his way through a physics degree, spending more time playing video games Starcraft and League of Legends than studying. He figured he might become a physics professor. But he was fundamentally more interested in ethics and morality. “There’s a chicken tortured for five weeks on a factory farm, and you spend half an hour eating it,” says Bankman-Fried, who is a vegan. “That was hard for me to justify.”

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THE CROESUS OF CRYPTO

FTX COFOUNDER SAM BANKMAN-FRIED BUILT A $22.5 BILLION FORTUNE BEFORE HIS 30TH BIRTHDAY BY PROFITING OFF THE CRYPTOCURRENCY FRENZY—BUT HE’S NOT A TRUE BELIEVER. HE JUST WANTS HIS WEALTH TO SURVIVE LONG ENOUGH TO GIVE IT ALL AWAY.

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November 2021