FTX founder Sam Bankman-Fried gets by on 4 hours' sleep and multitasks on 6 screens. Insiders break down what the 29-year-old crypto billionaire is really like — and the tough questions facing his company.

 

Sam Bankman-Fried on top of a collage that features MIT, Hong Kong, Berkeley CA and Nassau, Bahamas, against a teal background with the logos of FTX, Bitcoin and Solana
FTX; Marianne Ayala/Insider

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Roughly three years ago, the young Wall Street trader turned crypto-company founder Sam Bankman-Fried traveled to Asia for a conference, having become intrigued by a gap in bitcoin prices on Asian and Western exchanges that came to be known as the kimchi premium. Within days of landing, he had set up shop in a WeWork office and told the rest of his team at Alameda, the then fledgling crypto-trading startup he founded, to get on the next plane. 

It's a testament to his magnetism that they did. 

"We need to have people over here, like, immediately," Andrew Croghan, Alameda's former chief operating officer, recalled Bankman-Fried saying. "I think we're losing $50,000 a day by not working out of Hong Kong instead of Berkeley."

As soon as they landed, the newly relocated employees got to work setting up their computers, snapping up every monitor and cable they could find from malls and street stalls near the WeWork office, according to Croghan.

"When someone else would have worried, 'How do we procure this?,' he didn't. We just cut out all that stuff for ruthless efficiency," Croghan said. "And it works."

It more than worked. By setting up shop in Hong Kong, Bankman-Fried, now 29, and Alameda banked 10% daily gains on million-dollar trades, thanks to the arbitrage play. It also proved to be the pivotal milestone in Bankman-Fried's journey from relative obscurity just four years ago to the head of a crypto empire with a personal fortune of $26.5 billion, according to a Forbes estimate as of December 13. 

In 2019, he launched the crypto exchange FTX, which now boasts a valuation larger than the market capitalization of several S&P 500 companies. He's won the confidence, and the financial backing, of the world's savviest investors, with Tiger Global, Sequoia Capital, and BlackRock among those that have chipped in to FTX's recent funding rounds. He's also secured partnerships with some of the biggest names in sports, business, and entertainment, from NBA star Steph Curry to famed NFL quarterback Tom Brady. He's become a go-to talking head for the crypto community, frequently appearing on Bloomberg and CNBC to analyze market dynamics. He's also made his name as a philanthropist, with FTX earmarking over $16 million for charity so far this year.

And he's done it all at a time when crypto is facing the most intense regulatory scrutiny it's ever seen. After regulators in mainland China cracked down on crypto mining and trading in all forms, Bankman-Fried pulled up stakes for the second time in two years, moving FTX to the Bahamas, which passed landmark crypto-friendly legislation in late 2020. While FTX has managed to stay out of trouble, rival exchanges have racked up big fines or faced regulatory probes

It hasn't been a completely smooth journey. Bankman-Fried — who has a strong aversion to inefficiency — is running the company with a skeleton crew of developers compared to FTX's competitors. That, coupled with the global relocations and the breakneck pace of growth at both firms, has taken a toll on some of his employees, who say they had to leave their jobs due to burnout. 

None of this is alarming to his Silicon Valley backers, who see in Bankman-Fried a once-in-a-generation talent. 

"To me, he's like the Mark Zuckerberg of crypto," said Edith Yeung, a venture capitalist at Race Capital and one of FTX's seed investors. Bankman-Fried is the only other person besides Zuckerberg to have gotten so rich so quickly, according to Forbes. 

Insider spoke with several of Bankman-Fried's closest friends, colleagues, and investors — and Bankman-Fried himself — for an in-depth profile of the precocious founder. They broke down the traits that make him successful, what it's like to work alongside a leader with a relentless work ethic and boundless ambition, and how he's been able to skirt regulatory scrutiny and court major investors.

Their insights also highlighted what an extreme high-wire act he has to walk: staying on the good side of regulators, keeping investors happy, not burning through workers, and keeping up a grueling pace as the company expands.


One factor that could help Bankman-Fried pull it off is his unusually adroit multitasking skills, according to people who know him. 

"You will often see him watching football on one screen, watching YouTube videos of like Rihanna on another screen, responding to messages on a third screen, trading on a fourth screen, on a phone call on a fifth screen, kind of all at the same time," said Caroline Ellison, co-CEO of Alameda Research. 

Playing games growing up, his inclination is if a board game is fun, you should play two simultaneous games at once with a timer. Gabe Bankman-Fried 

It's a skill he honed growing up in Silicon Valley, the oldest of two brothers and the child of two Stanford University law professors. He and younger brother, Gabe, enjoyed the intellectual challenge of board games ranging from Magic: The Gathering to bridge and chess. But playing one game at a time wasn't challenging enough for the older Bankman-Fried.

"Playing games growing up, his inclination is if a board game is fun, you should play two simultaneous games at once with a timer," Gabe Bankman-Fried told Insider. 

It's also a way to stave off boredom, which Bankman-Fried admitted can happen pretty quickly.

"If I don't think that I have enough to be thinking about, like in cases where there's no time pressure and other people who take very long times on their turn to move, I circulate," he told Insider, adding that he will "start playing on my phone, my computer, and doing other things" when the other party moves slowly. 

As a student at the Massachusetts Institute of Technology, Bankman-Fried belonged to a fraternity called Epsilon Theta, a group of roughly 20 people who swapped college drinking and partying for solving puzzles and playing board games. Outside of maintaining good academic work, he also juggled various student organizations, recalled an MIT classmate Sam Trabucco, the co-CEO of Alameda Research, who has known Bankman-Fried since they met during a five-week math camp at Mount Holyoke College in 2010.   

Bankman-Fried joked that he was "absolute trash" in college in terms of getting stuff done. "I worked like an hour and a half a day in total and had trouble getting places on time," he said. "I was a really negligent student."

But by the time he landed at the secretive Wall Street quantitative-trading firm Jane Street, in June 2014, his time-management skills had become one of his strengths. He relished the intellectual challenge and soon mastered the art of making quick decisions under high pressure, according to Ellison, who worked on the equities-trading desk at the firm.

Working on Jane Street's international ETF desk, Bankman-Fried learned how to carefully execute arbitrage trades, exploiting the price discrepancy of ETFs traded on different global exchanges. 

But it wasn't until he started trading in the fast-moving crypto markets that his trading prowess truly began to shine. He founded Alameda Research in Berkeley, California, in October 2017, where he made the fateful bitcoin arbitrage trade.

Ellison and Trabucco both said Bankman-Fried is able to identify opportunities and move faster than most traders. This uncanny ability soon landed him the moniker "the Moby Dick of crypto whales" — for the big moves the firm made in the crypto market.

Screenshot 2021 06 04 at 12.57.45
Sam Bankman-Fried, founder and CEO of crypto exchange FTX.
FTX Official/YouTube

The stealthy but fast rise of Alameda Research also attracted the attention of Ryan Salame, who was working for crypto-firm Circle's over-the-counter trading desk in Hong Kong at the time. Salame recalled that the firm "sort of popped up out of nowhere" but offered "extremely competitive" pricing, which prompted him to start trading with it. 

It didn't take long for Salame to decide that he wanted to work for Bankman-Fried, whom he met in person at a conference in Singapore. 

"I don't think I've ever spoken to or interacted with an individual like him before," said Salame, who joined Alameda as the head of OTC. "To be that smart but also have the emotional component as well, and be able to communicate in a very real way and just be interested in talking to people, I was instantly very impressed with him."

With the trading profits from Alameda, Bankman-Fried had more than enough money to donate to charities — the primary reason he turned to crypto in the first place. But he had even bigger ambitions.


Bankman-Fried wanted to create an alternative to the "shitshow exchanges" that existed when he was trading in 2017 and 2018, he told Insider in a May interview.

It was a daunting task. Running a crypto exchange has never been an easy business, especially in the US, where banks, wary of the illicit uses of cryptocurrencies, refused to do business with exchanges. After establishing themselves as legitimate businesses, big players such as Coinbase and Gemini now have to comply with extensive laws and regulations that can be burdensome for exchange operators. As a result, US-based crypto exchanges tend to offer a limited set of products and services. 

By contrast, exchanges outside the US operate with few restrictions, allowing them to offer traders exotic derivatives products, such as leveraged tokens and tokenized stocks. Traders could also trade at 100 times margin — meaning anyone with $1,000 can instantly make a $100,000 bet. That flexibility has fueled breakneck growth in offshore exchanges. 

In 2017, Changpeng "CZ" Zhao famously built Binance from a $15 million initial coin offering to the world's largest crypto exchange, with a billion-dollar valuation, in 180 days. Bankman-Fried did not launch FTX until 2019, but his derivatives exchange went from being relatively unknown to ranking sixth in spot trading and second in derivatives trading  — right after Binance — in just two years, according to CoinGecko. (In July, both FTX and Binance cut the leverage limit to 20 times, from 100 times and 125 times, respectively, but some offshore exchanges such as Bybit still offer traders up to 100 times leverage.)

Professional traders have flocked to FTX for its cost-effective features such as low trading fees, lending capabilities, and the ability to trade tokenized versions of stocks and futures on tokenized stocks, as well as in multiple sub-accounts with varying levels of risk.

To build a competitive platform in such a short period of time, Bankman-Fried worked furiously, famously sleeping four hours a night on a beanbag chair next to his desk and taking calls from clients and investors at 3 a.m.

The single thing I'm most worried about for FTX is that we become slow and dysfunctional Sam Bankman-Fried

Salame recalled an incident when Bankman-Fried had been up for 30 hours straight and had just gone to bed when a client called. Salame, who had just seen Bankman-Fried lie down, did not have the heart to wake him up and rescheduled with the client — to Bankman-Fried's chagrin. 

"He said 'No, you wake me up next time, there's no question about it.'"

Salame said working for Bankman-Fried is "moving" and "powerful" — so much so that he left his post as the head of OTC for Alameda Research in Hong Kong to follow his boss to the Bahamas to become CEO of FTX Digital Markets. "The company is everything for him," said Salame.

So far, FTX's latest trek across the world has paid off handsomely. While the combination of beautiful beaches and high-speed internet holds appeal for even the most laser-focused crypto traders, the move offered other benefits. The island is just an hour-long plane ride to crypto hubs like Miami, and the FTX team no longer has to contend with a 12-hour time difference or draconian quarantine requirements.

Far from lying on a beach, however, Bankman-Fried has cranked up his blistering work and travel schedule even further since moving. Not all of his employees can match his pace. Three former employees, including one who spoke to Insider on condition of anonymity, said that they resigned after feeling burned out, even before the move to the Bahamas. 

"Whilst it's inspiring to work with SBF, it's grueling at the same time," said Noah Dummett, a former trader at FTX and Alameda, in an email to Insider. "The expectation is that everyone at the company is working towards a common goal, and you should optimize your time and direction to point towards that goal at all times. Maintaining relationships outside of Alameda and FTX is difficult, and burnouts are common."

"Day to day was to come into the office, read Slack and have breakfast, write code, eventually order lunch while working, then dinner while working, go home," said one software engineer who said they worked at FTX and Alameda, in an email. "Repeat 7 days a week."

FTX has a remarkably small staff relative to competitors. For its first six months, FTX was built by just two software developers, according to Bankman-Fried.

Two and a half years later, he only has between 10 and 25 working on the exchange and all of its subsidiaries, according to the company. By comparison, Binance currently has around 180 job openings for engineers, while Coinbase has around 120 open roles in the engineering department.

"The single thing I'm most worried about for FTX is that we become slow and dysfunctional," Bankman-Fried said. "I hope we won't, but we've seen it happen at a lot of companies."

Bankman-Fried faces a thorny dilemma: hire too many employees and see his fears about inefficiency realized, or hire too few and deal with high attrition.

FTX's developer headcount surprised seasoned exchange executives like Jerald David, whose career includes stints at the New York Mercantile Exchange, Dubai Mercantile Exchange, and Chicago Mercantile Exchange. 

"I was part of a team that created a crypto exchange from scratch, and the model is simple — the greater the number of devs, the faster you can scale," said David, who is now the president of crypto asset manager Arca Capital Management. 

David said the fact that FTX was built with two developers in the first six months is "impressive," but that operating such a high-volume exchange with fewer than 30 developers is "not the norm."

He compared the size of FTX's developer team to that of the CME, which boasts 500-plus developers. CME recently acquired crypto derivatives exchange ErisX, while FTX's US division bought crypto derivatives exchange LedgerX in August, effectively making them competitors.

By having a smaller team, Bankman-Fried said he can quickly make decisions and push new releases. 

"There's a cost, but I think that cost is well worth paying," Bankman-Fried said. "When push comes to shove, the single thing that is most important to us is that we remain efficient and coherent as a company."

To ensure this, Bankman-Fried sometimes even helps out on technical support.

"Sam will still, to this day, jump in and answer a support ticket," said FTX's Salame.


Bankman-Fried said the firm's attrition rate is actually pretty low — around 5% a year or less — but he acknowledges that burnout is a concern, and that his employees sometimes may not take as much vacation as they need to. 

"I think it's important that people push themselves to achieve what they can but not push themselves beyond that point, to the point where they are just burning out," he said. "I think that is something that we have to struggle with constantly, walking that line correctly."

Still, Bankman-Fried has a higher threshold for burnout than most. 

"When I feel burned out, usually that means I have to take a night off or get a 10-hour sleep for a night to recover," he said. "If I take four days off, I start to get bored and really antsy about what's going on at work and wanting to get back."

I think a lot of us knew that what we were doing was not sustainable. Andrew Croghan

Ellison, the co-CEO of Alameda Research, said Bankman-Fried is able to work harder than most because he is truly motivated to give his crypto wealth away and make a positive impact on the world. 

"I think if that's really what you care about, I think you can sustain it," she said. "I think you can do a lot more than a lot of people realize, and I think that's what Sam is trying to do."

But as FTX grows into a crypto empire, even some of the most devoted employees could reach their personal breaking points.

"I think about less than 50% of the 10 people I started with are there, and I think a lot of us knew that what we were doing was not sustainable," Croghan said.

And newer recruits, who lack the same close bond and shared vision as early employees and the company's founder, may not be as well-equipped to handle the long hours and Bankman-Fried's direct style of communication.

Bankman-Fried readily acknowledged that he considers giving feedback to be his biggest weakness.

"I think that it ends up being that the actual distribution of feedback that I offhandedly give sounds substantially more negative than I actually feel," Bankman-Fried said. "And I think that for people who aren't self-aware of that, or even sometimes for people who are, it can be a little bit hard and demoralizing to hear that." 


Shark Tank investor Kevin O'Leary — known for blunt feedback himself — said it's not rare to meet energetic young founders with big ideas, but finding those with the capability to pull them off is another matter. 

"Vision is overrated; what you need is execution, '' O'Leary said. And he feels Bankman-Fried has both.

O'Leary — who until recently was a big crypto skeptic — became an FTX ambassador and shareholder earlier this year. He attributes his change of heart to what he calls FTX's "investment-grade compliance."

"I thought, 'Okay this isn't some app you download on your iPhone and put millions of dollars into it. This is real corporate infrastructure,'" he said. 

Sam Bankman-Fried is shown sitting at a long white table having dinner with Anthony Scaramucci  and Shark Tank investor Kevin O'Leary.
Sam Bankman-Fried dines with (from left) Steve Cohen, Anthony Scaramucci, and Kevin O'Leary at the SALT New York conference
SALT NY

Venture investors like O'Leary count regulation as the biggest potential risk associated with investing in crypto. Over the past year, the SEC has kept Coinbase from pushing out a lending product, while financial regulators in the US, European Union, and Asia cracked down on Binance

Amy Wu, a venture capitalist at Lightspeed who invested in FTX's most recent funding round, said that as far as she's aware, FTX is the only exchange to avoid negative press around regulation. 

Wu said her team evaluated both the type of licenses FTX holds in various markets, its open communication with regulators, and its approach to regulation. 

"FTX actually is one of the most compliant and closest to regulators of any crypto exchange in the world," she said. 


Bankman-Fried shows no signs of slowing down in his quest to rapidly expand FTX. He is already seeking to raise another $1.5 billion for the company, just six weeks after the funding round that valued it at $25 billion, according to The Information, which cited two unnamed sources with knowledge of the matter. (A spokesperson for FTX said he could not confirm or deny the report.)

The new round, which would value FTX at $32 billion and its US division at $8 billion, could land just as Bankman-Fried and the broader crypto community stand at a critical crossroads. 

The market value of all cryptocurrencies has surged to $2.3 trillion from roughly $800 billion at the start of the year. Traditional Wall Street firms are ramping up their crypto activities, adding weight to some of these nascent markets, while retail investors are driving up meme coins like dogecoin and shiba inu. Celebrities and star athletes are fueling the expansion of crypto companies through promotional deals. And 16% of Americans have had some exposure to crypto, according to a Pew Research Center survey.  

But scams, frauds, ransomware , hacks, and money-laundering activities associated with crypto are also on the rise. And that has Washington, D.C., on alert. According to some, Bankman-Fried's startup — and the crypto ecosystem it operates in — has expanded faster than regulators can keep up with.

"Part of the reason Web 3.0 moves so fast is because there's not much regulation or relatively little regulation," said Anthony Lee Zhang, an assistant professor of finance at the University of Chicago's Booth School of Business. "You can build something and launch, and then you don't have to deal so much with regulators."

While FTX has been in regular contact with regulators for some time, the scrutiny is heating up. 

Earlier this month, Bankman-Fried testified before Congress about digital assets and the future of finance. While most policymakers at the hearing said they were willing to engage in refining regulations for the crypto industry, some viewed the rapid growth of digital assets as a threat to financial stability and expressed other concerns, such as the use of digital currencies to fund criminal activities.

"The industry has the potential to improve a lot of people's lives," Bankman-Fried countered at the hearing. 

Several insiders have drawn comparisons between Bankman-Fried and the founder of Facebook — who has also faced tough questions from regulators — as they look to the future of FTX. 

Zuckerberg built a social-media empire with a market cap of more than $900 billion from the company he founded at age 19. He did so in an era of tech, often referred to as Web 2.0, in which user-generated content and social networks flourished. 

Facebook changed the world in that time, but in recent years, it has drawn increased regulatory attention for everything from data-privacy issues to a failure to tighten controls on false information published on the platform. 

Now an era of crypto, decentralization, and the virtual world, sometimes called Web 3.0, seems to be emerging, with companies like FTX at the forefront.  Zuckerberg is in on the metaverse charge, too, changing Facebook's name to Meta, and committing to spend billions and hire thousands of staff dedicated to building out an even more digitized ecosystem.  

That's likely to  trigger more regulatory scrutiny, which could slow down or impede the adoption of the metaverse that Zuckerberg envisions. Crypto could face the same double-edged sword, where increased regulation and mainstream adoption means companies operating in the ecosystem could grow at a slower pace. 

"It's going to take some time for regulators and crypto to learn to work together. And that's going to slow down the pace of progress compared to the crazy pace that they are doing right now," Lee said. "But I think that is a necessary condition for it to be both mainstream and doing things that ultimately make the world better and the economy more efficient."

For Bankman-Fried, the Zuckerberg parallel is one he's not particularly fond of.

For one thing, those who know him argue his motives are more altruistic. 

"Making as much of a difference as possible is really our moral obligation," his brother Gabe said. "I think that was something that we took very seriously from an early age." The brothers are proponents of effective altruism, a philosophy that emphasizes using one's resources to accomplish the most good for others.

And while Zuckerberg has been at loggerheads with regulators as the company has expanded its reach, Bankman-Fried is trying to set a new precedent.

He's already entered the political realm as one of President Biden's biggest donors in the 2020 campaign, and he appears well-positioned to tackle D.C.'s intensifying spotlight on the crypto space through his formation of relationships with regulators, according to multiple insiders.

"In 10 years, I'm expecting that SBF will be one of the richest people in the world, tackling some of humanity's most critical issues," Dummett said. "A career in politics would not be the most surprising to me either — he's well-placed, with the right motivation behind him to make it happen." 

Whatever his future holds, Bankman-Fried's drive, vision, and efficiency in building out a crypto empire will likely keep the Zuckerberg comparisons coming.

Zuckerberg, as Yeung noted, is still going strong at the company and continues to aggressively reach for new monthly active users to this day.  

"I think Sam will be the same way, and he's still only 29 years old," she said. 

That is, if he can sustain the grueling pace he's kept up so far, Yeung added.

"As long as he sleeps enough and does not drop dead, I think he will still go very strong as an entrepreneur longer term." 

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