The Big Whale: The markets are not at their best. How's FTX doing? Is this the first time you've experienced a Bear Market...
Sam Bankman-Fried: Yes, this is the first real Bear Market we've been through. But you know, one of the main characteristics of crypto platforms is that our operations are no more impacted than that by the market downturn. Every day, we continue to develop the business, create services and new tools for customers. So, yes, the markets are less buoyant, things are a little tighter, but in the end, that doesn't cause us to deviate from our trajectory.
So there's no problem? Are you optimistic about the next few months?
I honestly don't know. I can't say exactly what's going to happen from a macroeconomic point of view over the next few months. It all depends on interest rates. If there is a real rise in interest rates, a lot could happen. There could be further sharp movements on the markets. But overall, I'm fairly optimistic about the future of cryptos because the sector keeps growing. There are more and more use cases, the technology is improving (understanding everything about Web3) and regulation is gradually being put in place.
Since the collapse of Terra Luna and the downturn on the markets, you've been seen all over the place. Many people say that you are the "big winner" of the crisis. Do you share this view?
I can understand why some people say that, but you have to think in terms of the industry as a whole. When things go well for us, the whole industry benefits, and vice versa. Honestly, we can't say that there are winners and losers. The real question is how we're all going to get through this together.
You say that when, in the space of two years, the number of your customers has soared (it's now several million, editor's note) and FTX's valuation has soared...
Yes, seen from that angle, it's true...
You've embarked on several big acquisitions. Why have you done this? What do Voyager or BlockFi mean to you?
Some of these deals helped stabilise the markets (after the fall of Terra Luna in May, several companies went bankrupt, editor's note). But apart from that, these acquisitions will enable us to strengthen our position in the United States and continue to gain market share.
Are you thinking of buying Robinhood? Would that be a good deal for you?
That's an excellent question! There are two ways for a company to grow: either it buys companies or it continues to grow internally. The most important thing is to continue to grow, to attract users, whichever way you do it. We could buy a company like Robinhood, but that's not what we're looking at right now. Our challenge is to continue to grow organically.
Where are you today?
We have excellent figures. We do 6 times more volume than Coinbase even though we have 20 times fewer users (Coinbase claims 80 million users, editor's note). When you look at these figures, you can clearly see that there is great potential.
Do you have any other targets in mind?
Yes, we are interested in several companies, one or two in particular, but I can't tell you which ones.
Are there any companies in Europe?
Yes, of course! Especially in Europe. We already made several investments in Europe last year, which above all enabled us to obtain approvals in several countries. We're obviously keeping a close eye on what's happening in Europe, and we're looking at companies that might be of interest to us. If you have any ideas, don't hesitate (laughs).
Could European exchanges be targets?
If their adoption is substantial, it's very certain that we'll be following them closely.
How do you see Europe?
For us, Europe is an important area. To be honest, I thought Europe was lagging behind a bit, but you can see that there's a desire to develop and get back into the race. This is quite clear, particularly in terms of regulation with MiCA (Markets in Crypto-Assets), which is moving in the right direction. Things are moving forward all over Europe, in France of course, but also in the Netherlands, Germany and other countries, and I think things will continue to improve.
Are you planning to set up your European headquarters in France? Binance and Crypto.com have just done so...
These are things we need to discuss further. We need to be convinced that this is the right solution. But yes, it's one of the best options.
What do you like best about France? The regulation, the ecosystem?
Both without a doubt. There's a real ecosystem in France with start-ups and several major groups. Paris is also a global hub for finance and a place where people mix and pass through, which are important factors in deciding where to locate our European headquarters. We're looking for a central location, not just for its location but also for the role it plays. It's hard to find a more central location than France and Paris...
What do you think of the French government's very 'pro-Web3' stance?
It's very important to feel wanted, to have governments that want to work with you.
You know that Emmanuel Macron is trying to push Web3 in Europe. Do you think Europe could take the lead at global level?
Europe has a lot of assets, the game is wide open. It has every chance of becoming the leader ahead of America and Asia.
The current context clearly shows that there is a battle between the exchanges to become the biggest player. How are you positioning yourself?
There will always be a battle between exchanges to ascend to the throne, to be the one that dominates the others and that's normal, it's the basis of the economy, it's quite healthy. We have to compete to give the best. From my point of view, the best way to become a leader is to keep working, to focus on the product, to drive forward regulation, the adoption of cryptos.
You're all saying the same thing...
Not everyone in the sector innovates the way we do. There is a difference between those who innovate and those who copy. The most important thing is to offer the best products to customers.
What's the best service you've launched since the start of FTX in 2019?
It's hard to choose... We have simple products like US equities and also more complex products like spread orders or trading bots.
All trading platforms have their stablecoin, except perhaps FTX. Could you launch one?
Yes, it's very likely. We know how to create a stablecoin. We're just thinking about the best partner to do it with.
What might this stablecoin look like?
What I can tell you is that you'll be hearing from us quickly (laughs).
Platforms like FTX have more and more customers with an ever-expanding offering. Will you eventually replace the banks?
It depends a lot on the country. In the United States, there's a big difference between banks and other financial institutions. For us, it's more interesting to work with banks because they will manage some of the custody, particularly of dollars, which allows us to concentrate on the essentials, on tokenising assets and creating new products. In other countries, where banks are less powerful, the situation is different. There, exchanges could play an even more important role.
Could you become a bank?
It's not planned, and then the regulations on banks are very restrictive. After that, you should never say never. For the time being, our main objective is to offer the best possible trading platform that is accessible to everyone. Since the beginning of the year, we've been handling quite a few cases with the CFTC (Commodity Futures Trading Commission) on some of our products, so that's keeping us busy.
Speaking of services, what do you expect from the partnership with Visa?
When you look at the potential uses of cryptos, payment comes very far out on top. This is a major opportunity. Today, if you look at how payments work, a large proportion of them go through bank cards. That's the state of the market. By teaming up with Visa, we're integrating cryptos a little more into the real economy, and that's very exciting. With the Visa-FTX card, you'll be able to spend your dollars, stablecoins or bitcoins.
You'll be launching these cards mainly in South America, where there's a real demand. Would this be possible in Europe?
Absolutely! We're looking at ways of launching this type of product in Europe and other parts of the world. It just takes time, we need to move forward region by region.
The MiCA regulations have just been adopted. What do you think of it?
It's very good to have regulation of this kind. I'm sure it will benefit the sector. Today the European crypto ecosystem is still very fragmented with national legislation and regulators who don't share the same vision of the sector.
Do you think the United States should adopt legislation of this type?
In the idea yes, but there are different points to take into account. We need to move forward gradually. Things are changing on the spot market, but there is still little or nothing on the derivatives markets. The Senate is dealing with the regulation of new assets such as cryptos. They are currently working on these issues. It takes time, but the important thing is that it's clear for the ecosystem.
What do you think is the most interesting thing about MiCA?
I think it's precisely the fact that things are being regulated gradually. It would have been a nightmare if all assets had been lumped together. So I think that's the most interesting thing about MiCA. After that, we'll have to see how all this evolves over time.
And on Asia, how do you see things?
Historically, Asia was the centre of the crypto ecosystem. This is a little less true today, there has been a rebalancing in favour of the West. Japan, South Korea and Singapore are still very dynamic, but the momentum isn't necessarily on their side any more, although we'll obviously have to rely on Asia in the years to come.
Are you still in the process of raising funds?
Absolutely! We're working on it. The context is always very important when you want to make acquisitions. We already have a lot of cash. You can estimate the amount of cash we have from various public statements, but I can tell you it's between one and four billion dollars. FTX is clearly in a strong position to make small and medium-sized acquisitions. On large acquisitions, it's a bit different, but we don't want to spend all our cash.
Given the situation on the markets, is this the right time to make acquisitions?
It's not an obvious time. There are advantages and disadvantages. Our aim is to continue to increase the value of the company and things are progressing well. We're about to close a deal, which will probably be an extension of our previous fundraising. So it's certainly not an easy time to raise, but if there are opportunities, you have to go for it.
Will investors follow you?
We'll see!"
The Texas regulator has opened an investigation into your business. What's the problem?
I can't comment in detail, but from what we understand, we're being accused of having built one of our products incorrectly. Seen from the outside, this may give the impression that the product is not secure, but we are 100% confident.
What is this product?
I can't say.
Some people accuse you of unsavoury practices...
We don't use our customers' funds, we don't make loans with their assets, but I do think that our documentation can be clearer on this product. We are working to resolve this type of problem, and we are currently looking for someone to manage this product and its documentation. This will give everyone, including the regulator, a better understanding of what we do.
During the presidential campaign, you made no secret of your support for Joe Biden. Why did you do this? Are you happy with his politics on cryptos?
American politicians still talk fairly little about cryptos. Some bills are going through Congress and the regulator is also working on these issues. We'll see how things develop.
In any case, I'm much more optimistic than I was a year ago. I was worried that no regulatory measures would be put in place, but everyone has been working to get things moving. We'll just have to see what happens. If no progress is made in the next few months on regulating cryptos and integrating them into the real economy, it will be a real disappointment. It will also be a disappointment if we regulate the sector too much. We need to protect users without placing too many restrictions on a sector that is highly innovative. Economic freedom is fundamental.
2022 will go down as a very eventful year. How do you see 2023?
Overall, I'm very optimistic, both about regulation and use cases. I think things will speed up. I've been wrong in the past, so we'll see if I'm wrong this time too.
