Sam Bankman-Fried on his office beanbag chair, where he sleeps most nights.
IN JANUARY 2018, Sam BankmanFried, then a mathy 25-year-old who had recently left Wall Street to try his hand at buying and selling cryptocurrency, spotted a fabulous arbitrage: Because of a faddish surge of interest in Japan, bitcoin was trading for 10 percent more there than in America. Much of the rest of the cryptosphere was distracted by something even shinier—the 30 percent price gap between Korean and American bitcoin, known as the kimchee premium. But Korea has a restricted currency that’s hard to turn back into dollars; Bankman-Fried had tried to crack that trade, at one point calculating whether it made sense to get an airplane, fill it with people, and fly to Seoul to all buy bitcoin in person. Instead, he settled for Japan. It was still complex (or “quite annoying,” in his words) to execute at scale, but BankmanFried and some friends, with whom he had founded a trading firm in Berkeley called Alameda Research, cobbled together a chain of intermediaries, including obscure banks in rural Japan, to take advantage of the monthlong price discrepancy. They moved up to $25 million a day. “You can do the math,” said Bankman-Fried. “That was the craziest trade I’ve ever seen.”
When Bankman-Fried and I spoke over FaceTime recently, it was 10 p.m. in Hong Kong. The lights of the city were visible out the window of his high-rise office, where he presides over a fledgling crypto-empire. Alameda, which turns over $2 billion a day, ranks No. 10 on the bitmex leaderboard of all-time mostprofitable traders. Bankman-Fried now spends most of his time building a second business, called FTX—a high-volume, low-fee platform for trading derivatives like options and leveraged tokens—which Mike Novogratz, the hedge-funder turned crypto-enthusiast, recently described as “the most innovative exchange out there.”
Continue reading your story on the app
Continue reading your story in the magazine
This One's on Her
A melancholy farce is nearly capsized by its star.
Daniel Dae Kim built a career by picking his battles, walking away from a job only when the inequities got too big to ignore. He still believes Hollywood can be reformed.
The Detonations of Alice Neel
A survey of her portraits at the Met is packed with raw emotional power.
The City Politic: David Freedlander
Stringer Theory The comptroller’s reward for a career in public service? Third place in the polls.
Political Animals: Olivia Nuzzi
The No-Splash Tell-all What the muted reaction to Hunter Biden’s crackfueled memoir says about his father’s Washington.
Moral Panic Is Back With a Vengeance
Lil Nas X’s “Montero” is the latest song to raise the hackles of conservative commentators—and everyone has a little something to gain from the controversy.
Esther Perel Goes Off Script
She became today’s most famous couples therapist by ignoring all the rules of the trade.
Mayor de Blasio hired an ''equity warrior'' as schools chancellor. How parental politics-and the pandemic-left him defeated
Richard Carranza’s Last Stand
Kingpins and wannabes barrel through the London underworld.
BidenBucks Is Beeple Is Bitcoin
In a system rigged by the rich, outsiders have to make their own volatility.