30-year-old Hong Kong resident, Sam Bankman-Fried is recognized as one of the wealthiest people in the crypto space. And no, he did not inherit any money from his parents!
Sam is the CEO of FTX, a cryptocurrency exchange and owns Alameda Research. As of 2022, Sam Bankman-Fried has a net worth of $20.5 billion according to Forbes.
Remarkably, despite his astronomical rise to the world of young billionaires, this former Wall Street trader lives a typical millennial lifestyle. He is a vegan, shares an apartment with his roommates, comes to work in shorts and t-shirts, and has a bean bag in nearly every room in his office.
He rarely goes out and doesn’t go on vacations, saying, ” Just like an idle software, your brain is less efficient after a long break.”
The son of Barbara Fried and Joseph Bankman, both Stanford law professors, Sam Bankman or SBF as his employees would call him, was born in 1992 in Stanford California.
He graduated from the Massachusetts Institute of Technology with a degree in physics. He previously mulled on pursuing an academic career but went down the entrepreneurial route instead.
However, the advent of the “effective altruism movement,” a philanthropic philosophy that seeks to maximize the impact of donations through the use of data, convinced him to work in finance, wanting to earn quick money to later donate to charities.
How He Made His Fortune
For three years, Sam Bankman worked as a trader at Jane Street, a quantitative trading firm on Wall Street. He was tasked with building models to predict stock market movements. Later, he left to start crypto trading and founded Alameda Research in 2017. He was looking to jump on the digital asset market.
Two years later, he saw the gap between the burgeoning potential of the new crypto ecosystem. With its very large customer demand and its high volatility, he found that it was growing so fast with no infrastructure supporting it.
With his Alameda colleagues, he established FTX, a crypto derivative exchange that uses blockchain technology to create a stable trading environment.
He then discovered the “kimchi premium,” an arbitrage brought on by South Korea’s enormous demand for bitcoin. It went for as much as 50% more expensive than what it was in the United States at that time. It was a high-return, minimal risk trading opportunity for crypto traders.
He then ended up in Japan because of restrictions that were enforced in Korea. He was working a $25 million per day trading value with the help of intermediaries and local banks. Today, his crypto-currency empire under Alameda Research turns over $2 billion per day, significantly flexing crypto’s emerging market power.
He encountered several obstacles in Hong Kong’s regulatory threat, stating that investments must be limited to professionals and companies with at least a business portfolio of $1 million. Bankman acceded to this and proceeded to restrict sign-ups to professional investors.
He claims that he is “totally on board” with Hong Kong’s policies around anti-money laundering and correctly identifying customers.
Nevertheless, Bankman is actively pursuing his initial goal of making donations that create a significant impact. Recently he donated to an open AI research outfit that is working to make sure that Artificial Intelligence benefits humanity.