How Sam Bankman-Fried Became A Crypto Billionaire In Just A Few Short Years
In a relatively short time, Sam Bankman-Fried, the CEO and founder of FTX, the world's third-largest crypto exchange (via CoinMarketCap), became one of the richest men in the world — and, according to some, is the next Warren Buffet (via Fortune). For a man that is running a $40 billion crypto empire, his casual appearance and lifestyle are a paradox. He is known for his wild mop of curly hair and intentionally casual attire, donning t-shirts and shorts on most occasions. He drives a Toyota Corolla and shares a penthouse in the Bahamas (where FTX is based) with 10 other roommates (via Bloomberg). But make no mistake, this billionaire is out to take the crypto world by storm.
The 30-year-old is famous for his desire to give away all of his earnings in a bid to improve the world. According to Bloomberg, he wants to donate 1% of his earnings — or $100,000 — a year at a minimum. Let's dive deep to see how this young MIT graduate with no prior crypto experience was able to dominate the industry and earn his billions.
He works around the clock
Many media sources have reported that Sam Bankman-Fried often works around the clock to get things done. For the emerging crypto-billionaire to build a billion-dollar company in an extremely short period meant that he spent most of his time at work. The New York Times reported that on "most nights, he slept on a beanbag next to his desk." His peers have also recounted what his busy life was like in the beginning.
One of his friends claimed to Bloomberg that he often skipped showers in the early days of his efforts, didn't have relationships, and possibly saw sleep as an "unnecessary luxury." According to Business Insider, there was one standout incident that probably best sums up his demanding work ethic. Bankman-Fried had been up for 30 hours straight and had just gone to bed. A client called shortly afterward and one of his FTX employees rescheduled with the client instead of waking up. When Bankman-Fried found out, his response was, "No, you wake me up, there's no question about it."
He didn't rush to hire a bunch of employees
Starting with his first company Alameda Research and then FTX, Bankman-Fried never was one for hiring tons of people to assist him. When he founded Alameda Research in 2017, he did it with the thinking that you don't have to be a million-dollar company to access the crypto markets. His company started with a staff of around 20-plus people in a rented office space in Berekely, as reported by The New York Times. These included some of his friends such as Gary Wang, his housemate from MIT, Caroline Ellison, a Wall Street trader, and Nishad Singh, his younger brother's friend who was an engineer at Facebook.
When it comes to employee size, the cryptocurrency billionaire believes that too many employees are not an asset. In a tweet this past June, he revealed that venture capitalists believed more employees were better for the company. He said, "We told them additional employees added too quickly were a net negative, and they could take it or leave it." He further stated in his June 14, 2022, tweet that FTX had about 300 employees. "When it comes to hypergrowth, you can't replace 'growing revenue' with 'growing expenses.'"
He wants federal regulation in the crypto industry
Bankman-Fried is open to federal regulation and has emphasized this point on several occasions in different interviews. In a recent interview with CNBC, the FTX CEO said that federal regulation is good for cryptocurrency. "I think it's good for everyone. It gives customer protection which we're missing right now, real federal oversight, protection against financial crimes... and at the same time allows (crypto) companies to bring liquidity back to U.S. markets."
According to him, the so-called crypto-winter saw many major crypto exchanges lose profits including his own company, FTX, which took a "significant hit" amid falling crypto prices (via Fox). But, according to him, this fallout could be used to "shape crypto regulation," which is now being debated in Congress.
His openness to being regulated is an approach that seems to have paid off for Bankman-Fried. These days, FTX is seen as a "lender of last resort," which means that his company rescues crypto companies that are going under by giving them loans (via CNBC). Recently it made a deal with the crypto company BlockFi which gives it an option to acquire them for as much as $240 million.