"Sam Bankman Fried was my hero. This has blown my mind"

9 November 2022

3 minute read

"Sam Bankman Fried was my hero. This has blown my mind"

I'm a junior trader at crypto trading firm. I graduated last year and am a big believer in the future of crypto, but what happened yesterday has blown my mind.

FTX had a program to hire students at my university and it was seen as one of the best places to work. They have a cool office in the Bahamas and had only just tweeted about their new Miami office. In the span of a few days they've gone from this and from Sam Bankman Fried tweeting about his political donations to chaos.

Excited to get the keys to our new Miami office today pic.twitter.com/ULK9EsFeo0
— FTX (@FTX_Official) November 7, 2022

It now seems that Binance might not rescue FTX after all. If that happens, what will it mean for FTX employees? In June, SBF came out with the following twitter thread below about FTX being a good place to work. In it, he says FTX has deliberately refrained from over-hiring, that its 25 developers are more productive than most and that 250 employees were probably enough.

A lot of people I know bought into that. There was a huge amount of admiration for what SBF achieved in such a short space of time. SBF was all about taking things slow and steady and not making the mistakes of other crypto firms regarding growth and subsequent staff cuts, but now what?

I think this will make people of my age much more hesitant about going into crypto. Personally, I'm concerned about the broader crypto eco system, but I also think that if you can hold a job in this environment and crypto bounces back over the next few years you’re going to be in a very good place.

1) Zig Zag and hiring:

why FTX is going to keep growing as others cut jobs
— SBF (@SBF_FTX) June 6, 2022

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AUTHORTim Newman

Insider Comment

Ni
Nick Poulos
11 November 2022
Are there any successful crypto projects yet? Every single one is some concoction of fraud, sketchy trades, inexperience and mismanagement, back alley dealing and absolutely no regulations. Even stable coin projects, which should have none of the volatile swings of traditional crypto, have not been immune.
Why any sane person would want to get involved in an industry like this is just beyond me. The only thing I can see is that the get rich quick aspect must too much to ignore.
Crypto is an exciting idea with a lot of potential, almost zero of which has been actually realized. Until there is a real true reason to use crypto, and the industry matures and gets rid of it's wild west image, I feel like this is stuff to avoid.
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N_R
10 November 2022
Crypto as an industry imho needs to do the tedious stuff of building out the back office, controls and compliance - - all the functions that are similar to a bank or investment house, and that have the least to do with what makes crypto exciting. So you have a mismatch between the risk-embracing people drawn to it, and the steady/wonky types that can keep a firm from catching on fire and sliding into the sea on an avalanche of volatile market conditions.
I suspect that many of the crypto firms that are up and running have dedicated only the skimpiest resources to the back office / control side of the house, or are using off-the-shelf technology to simulate the capable performance of these functions. Probably software on the level of what a community bank runs, which corresponds to about the number of employees to be monitored in a crypto firm.
But when market conditions get bad, it's the 80/20 rule. 80% of the situations you encounter, you can handle. But that possibly fatal 20% of situations require 80% of the effort, in terms of customized technology, in order to handle them successfully.
Lehman and Bear didn't fail because they forgot how to count money. They failed because their risk models and controls weren't up to the task of handling the unexpected and unprecedented.
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