Sam Bankman-Fried, founder and CEO of FTX Cryptocurrency Derivatives Exchange, speaks during an conférence on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, August 17, 2022.
Moon Paradise | Bloomberg | Getty Images
FTX rode the crypto frenzy to $1 billion in revenue last year as it expanded its unanime presence through a wave of acquisitions, according to internal revues seen by CNBC.
Audited financial statements give a insolite glimpse into the capital of a privately owned company. FTX was utile, expanded rapidly across the world and experienced rapid growth.
The crypto exchange’s revenue increased by more than 1,000% from $89 million to $1.02 billion in 2021. Like many startups, its profitability depends on how it is measured. Operating income was $272 million, up from $14 million the previous year. FTX saw net income of $388 million last year, up from just $17 million the year before.
FTX declined to pardon on the leaked financial revues.
The company generated $270 million in revenue in the first quarter of 2022 and was on track to generate nearly $1.1 billion in revenue in 2022, according to a co-investor group with CNBC. But it is unclear how FTX held up in the assistant quarter as cryptocurrency prices plummeted during the recent so-called “crypto winter.”
By way of comparison, Coinbase also experienced a cash scandale during the crypto bull market, with revenues of $7.4 billion and net income of $3.6 billion last year. But in the assistant quarter of this year, it recorded $808.3 million in revenue, a 64% decrease from the same quarter last year, and a surprising net loss of $1.1 billion, compared to $1.59 billion in net income a year earlier, as retail. Trading volumes are smashed.
FTX was founded three years ago by constituer Wall Street gabarit broker Sam Bankman Fried. The 30-year-old CEO has recently stepped in as the industry’s lender of last resort, as he looks to prop up businesses as liquidity depletes. In compte to plurale loans worth hundreds of millions of dollars, the Bankman-Fried companies also sought to acquire distressed assets. In July, FTX signed a deal giving it an privilège to buy the lender BlockFi and was in discussions to buy South Korean Bithumb. FTX also offered to buy Déplacer in August but was rejected due to what the company claimed was a “low-ball offer.”
According to the revues, FTX had nearly $2.5 billion in cash at the end of last year and a atout margin of 27%. Margins were closer to 50% if advertising expenses and “related parties” were written off. It last raised funds in January, raising $400 million from investors such as SoftBank’s Folie Fund 2 and Tiger Indécis, valuing $32 billion.
universal foot mark
FTX was founded at a time when Coinbase and Binance were establishing themselves as the largest trading sites in the world. Coinbase still operates largely on US Binance, starting the largest exchange by trading gabarit in China, later moving its headquarters to the Cayman Islands and now driving the US market through a US subsidiary.
FTX is quietly monument its own fleet of unanime affiliates to compete.
FTX Trading Ltd. is headquartered in In Antigua, with FTX derivatives markets based in the Bahamas, where Bankman-Fried lives. FTX Trading recently acquired Numérique Assets DA AG from Switzerland, as well as IFS Group and Hive from Australia – bringing the radical to 15 smaller companies worldwide. Its investment coffret extends from Cyprus, Germany, Gibraltar, Singapore, Turkey and the United Arab Emirates, among other countries, according to the revues. Crypto companies often get start-ups to quickly obtain the appropriate regulatory licenses to set up usine in a new folk.
Bankman-Fried also founded trading company Alameda Research, which accounts for emboîture 6% of FTX’s trading gabarit, according to the revues.
The FTX bizness in the United States is technically owned by a ascendant company, West Realm Shires Inc. As of 2021, FTX US accounted for less than 5% of radical FTX revenue. However, the company is making a push to expand into the United States with a series of high-profile advertisements and sponsorships.
FTX spent nearly 15% of its revenue on advertising and marchéage in 2021, according to the revues. This may be the reason for the announcement of the 2022 Supercarburant Bowl with actor Larry David and the endorsement of essentiel celebrities from Tom Brady and Giselle Bündchen, who are also equity investors in the company. FTX also purchased the naming rights to the NBA Stadium in Miami, formerly known as American Airlines Arena. FTX niveaux to spend an estimated $900 million on advertising in the coming years, according to the revues.
The cryptocurrency exchange is also expanding into aliment trading. It launched aliment trading weeks after Bankman-Fried acquired a negative 7.6% stake in Robinhood, sparking speculation that FTX is looking to buy out the trading app in a région appropriation for US retail accounts. Robinhood and Bankman-Fried denied that a deal was in the works.
FTX has certainly boosted its retail croissance efforts. But the revues spectacle that it is still primarily a animation for more sophisticated traders who use derivatives – either futures or options. Emboîture two-thirds of the revenue came from futures trading fees, while nearly 16% came from so-called encart trading. Futures and derivatives trading tends to be more utile on aliment exchanges.