The ambitions of Sam Bankman-Fried, the future King of Crypto

There is a theory that Sam Bankman-Fried wants to become the King of Crypto.

There is another that says the billionaire CEO of exchange FTX sees crypto as a stepping stone on the way to Wall Street.

The latter started to be taken seriously quite recently, when Bankman-Fried reportedly considered buying stock and crypto trading firm Robinhood outright after taking a 7.6% stake – an offer he has carefully said he had not made but did not deny considering.

But the former took a big step toward reality – or maybe confirmation is a better word – when Bloomberg News revealed today (August 12) that it was in talks to buy a 60% stake in the Huobi cryptocurrency exchange.

With a 24-hour trading volume of $1.51 billion, FTX is the third-largest crypto exchange, according to CoinGecko. Add Huobi Global #6’s $1 billion (if combined, which would be further down the road), and Bankman-Fried would control the second-largest spot crypto exchange. FTX is already the second largest crypto derivatives exchange, although in both categories it is far behind Changpeng “CZ” Zhao’s Binance.

However, he is buying a lot more than Zhao, as the crypto winter price crash and a series of bankruptcies that stemmed from a stablecoin’s $48 billion collapse in May combined to put a lot of bargains on the table.

See Also: How Stablecoin’s $48 Billion Collapse Affected Crypto

Huobi would be Bankman-Fried’s biggest buy by far — CEO Leon Li would seek a valuation of up to $3 billion, Bloomberg said — but not the only one in the cryptoverse.

Not everyone is a fan of his ambitions.

“It’s dangerous for the whole industry to have connections to FTX,” Elliot Chun, a partner at buyout and crypto advisory firm Architect Partners, told Bloomberg last month. “That’s generally not good for a free market scenario, especially the free markets that crypto enthusiasts embrace.”

Empire building

Bankman-Fried’s empire has three main arms: FTX, which does not operate in the United States, the much smaller FTX US, and investment firm Alameda Research.

Read more: Voyager: Bankman-Fried, Crypto’s ‘White Knight’, Is Flying Under a False Flag

FTX US acquired Embed, a well-licensed stock clearing firm, in June, along with leading hardware wallet maker LedgerX and game makers Good Luck Games. It also recently launched a market for non-fungible tokens, FTX NFTs.

He also struck a high-profile investment deal in BlockFi, rescuing the crypto lender from bankruptcy with a loan that gave Bankman-Fried the chance to buy the company while cutting out all existing investors. And FTX US also discussed acquiring crypto miners.

FTX itself acquired Japanese exchange Liquid, Canadian crypto exchange Bitvo, and Blockfolio, a portfolio tracking app that became a trading app now renamed FTX App, as well as the launch of FTX Ventures, a venture capital firm.

He has also invested in three blockchain protocol developers – LayerZero, the NEAR protocol and Aptos Labs – as well as in the Web3 game company Metatheory.

The third arm is Alameda Research, the quantitative trading firm where the former Jane Street Capital trader made his first fortune. Alameda was involved with two bankrupt lenders: Celsius and Voyager Digital. It loaned $500 million to Voyager as it struggled – unsuccessfully – to avoid bankruptcy and then made what its CEO angrily described as a “low-ball” takeover offer.

Both will likely end up incurring losses, something Bankman-Fried has repeatedly – ​​without much modesty – said he’s willing to take on when trying to bail out struggling crypto firms for the good of the industry. It has been named crypto’s “lender of last resort”.

Alameda has four other investments: NFT marketplace Magic Eden, crypto bank and institutional trading and custody company Anchorage Digital, staking protocol DeFi Lido, and payment cryptocurrency developer MobileCoin.

Take stock

Bankman-Fried moved to shift FTX into equity trading, taking a stake in the “small but influential” exchange IEX, the New York magazine noted, and buying the well-licensed clearing firm Embed and the Delphia mobile stock market app.

“To put it another way, a billionaire who owns stakes in two exchanges, a hedge fund, a brokerage and a clearing house is now considering buying the brokerage outright,” the magazine noted on its blog. Intelligence.

With the May launch of FTX Stocks, he is trying to make his business an “everything exchange” with an “everything app.”

See also: Sam Bankman-Fried’s FTX aims to become the ‘every app’

At launch, FTX US President Brett Harrison said, “We’ve created a single, integrated platform for retail investors to easily trade crypto, NFTs, and traditional stock offerings through one interface. transparent and intuitive user”.

Act as

Bankman-Fried — increasingly known as “SBF” — “was able to seize the throne of crypto king, even becoming something of a meme himself,” New York noted, then as his shock of curly hair and his insistence on wearing a T-shirt and often khaki shorts become more well-known.

He’s been photographed in a suit exactly once in recent years — when he testified before Congress — but in industry circles he’s never been in uniform. Even when he’s onstage alongside former President Bill Clinton and model Gisele Bündchen, who along with her husband, star quarterback Tom Brady, is a spokesperson for FTX.

Then there’s his political profile, which jumped from zero to 60 two years ago when a $5 million donation to the Biden campaign made him one of its top political donors overnight. . It has since bolstered this by launching a (non-crypto) super PAC, Protect Our Future, for the 2022 election cycle and more generally taking a hands-on approach to lobbying.

“His ambition knows no bounds at this point,” Chris McCann, general partner at venture capital firm and early investor FTX Race Capital, told Bloomberg. “He’s not doing this out of the goodness of his heart.”

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