Forbes Exclusive Interview with SBF Full Text: Defending Crypto Derivatives
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Forbes Exclusive Interview with SBF Full Text: Defending Crypto Derivatives
This interview primarily discusses how Sam Bankman-Fried built a compliant exchange in this industry, how he used FTX's $900 million funding, misconceptions about cryptocurrency derivatives held by critics, and his ultimate intention to give up all his wealth.
Navigating Web3 tides with focused insightsBy Steven Ehrlich
Translated by Chen Zou
Sam Bankman-Fried, currently the wealthiest person in crypto, has a personal net worth of $16.2 billion. His cryptocurrency exchange, FTX, recently set the largest private funding record in crypto history—$900 million—valuing the company at $18 billion.
FTX’s rapid growth is fueled by surging demand for crypto derivatives such as futures and options, which allow investors exposure to assets like bitcoin without owning them directly. Most of these crypto derivatives are unregulated and often offer high leverage, enabling traders to amplify their positions. Due to this risk profile, crypto derivatives have drawn criticism and are widely blamed for causing and amplifying market volatility. However, Bankman-Fried calls this view short-sighted. In an interview with Forbes, he argued that the crypto derivatives industry is maturing, becoming more responsible, and will ultimately be a necessary component of a healthy crypto market. He also noted that critics who decry extreme leverage (sometimes 100x) in crypto may overlook the fact that similar services have existed for years in traditional markets like forex and commodities.
This interview primarily covers how Sam Bankman-Fried built a compliant exchange in the industry, how FTX will use its $900 million fundraising round, misconceptions about crypto derivatives, and his ultimate plan to give away all his wealth.
Here is the full transcript:
Forbes: I want to talk about the derivatives market—the interplay between derivatives and spot prices—because it's been getting a lot of attention lately. This was one of the first areas where you opened up the market for FTX. What role do derivatives play? And what do you think is a healthy ratio of trading volume across different types of markets?
Sam Bankman-Fried (SBF): It's a bit of a misunderstood space. Many people see something happening and assume it's the first time in history. That might be true in some cases, but not all. Derivatives are a good example. People point out that derivatives trade more volume than spot in crypto, which is true—but so does every other asset class in the world. The reason is simple: derivatives don’t require immediate delivery (like spot does), so they’re naturally more efficient. Here's an example: Bob buys an asset from Lisa. Suppose Bob buys one bitcoin from Lisa at X dollars. If it’s important for Lisa to have a physical bitcoin because she needs to send it somewhere, then it requires a physical transaction. If Bob needs dollars to pay for something, then again, it must be physical. But if neither party cares about short-term deliverability and they're just looking to take a position, they may not care whether it's a futures or spot contract. I think this increases market liquidity and makes the overall market more efficient.
Of course, there are cases where it reduces efficiency, and those get a lot of attention in crypto because they can sometimes be significant. I should emphasize that overall, I believe futures greatly increase crypto efficiency, even though in certain specific scenarios they reduce it. These instances usually happen during liquidations—for example, when people build leveraged positions, the market moves against them, and those positions get liquidated. This can create some volatility because liquidations involve actual settlement issues, which trigger further liquidations in a snowball effect, leading to greater price swings. This does happen in crypto from time to time. So yes, in some cases, futures can lead to illiquidity and sharp price movements. But personally, I think they solve more problems than they cause.
Forbes: When SEC Chair Gary Gensler recently spoke, he indicated a preference for considering derivative ETF applications over spot ETFs. Why do you think he sees derivatives as more acceptable right now?
SBF: I suspect he’s referencing CME (Chicago Mercantile Exchange), a venue he trusts. What matters to him is market transparency, compliance, and anti-manipulation safeguards.
Forbes: Let's talk about margin, another major factor that can accelerate liquidations or short squeezes. You recently decided to reduce or eliminate 100x leverage on FTX. One of your stated reasons was that "it only accounts for a small portion of your overall trading volume anyway." Given that this is a high-risk financial product, why did you initially decide to offer it to investors?
SBF: There were several reasons. One was that our users wanted it. We didn’t start with this feature, but our users asked us to provide it. Without offering it, they would leave the platform. A core mission of FTX is to serve our users and give them what they want. Another thing to note is that crypto isn't alone here—many asset classes offer high leverage, sometimes up to 500x. I think plenty of platforms offering stock trading provide over 100x leverage. At some point, people started paying close attention, but clearly, it wasn’t a core part of our business. I’m not trying to claim it was important to the market because I don’t think it was. Any position with excessive leverage can’t play a critical role in the market. It’s not something I consider particularly essential or beneficial to the health of the crypto market. I think regulators won’t have much interest in it, and removing it was the right move. Although I still maintain it received far less credit than it deserved.
Forbes: If you faced that decision today, do you think you’d continue offering that level of leverage?
SBF: Would I have done it from the beginning? If I could choose again, probably not.
Forbes: In a recent interview, you mentioned spending about five hours per day dealing with regulatory issues. Can you elaborate on that?
SBF: Cryptocurrency has always been regulated; comments suggesting it’s only now being regulated are incorrect. However, regulators are actively building frameworks, and the direction is clearer now than before. We’re seeing global regulators take a two-pronged approach: establishing licensing frameworks that legitimate businesses can apply for, while also cracking down on non-compliant activity. To clarify, one aspect involves license applications—sometimes applying for new licenses, sometimes through acquisitions, sometimes via dialogue with regulators. But the most important part is the paperwork. I think we’ve now submitted compliance applications in about six or seven jurisdictions.
Forbes: Are these six or seven jurisdictions ones where you’re already operating and that have just launched licensing regimes, or are they new regions you hope to enter?
SBF: That’s an interesting question. My answer is that many of these jurisdictions are places where we passively have users right now, but where we don’t operate any formal business. Part of our goal is to establish operations, marketing, offices, create jobs, and gain local government support in these areas. The other part relates to upcoming regulatory frameworks. Many of these frameworks either haven’t launched yet, have only recently gone live, or are vague and lack strong crypto awareness. So sometimes it involves reaching out to regulators and saying, “Hey, this is our business. We’ve seen your regulations—can we comply?” And the response is often, “That’s interesting… let me think about it.” Our aim is to engage in cooperative dialogue with regulators so we can enter local markets and operate under license. In some cases, they’re still using old frameworks that have existed for decades—but weren’t designed for crypto.
Forbes: One of the most fascinating things about FTX, I think, is your scale of growth. What do you think helped you grow so quickly?
SBF: It comes down to many factors. First, we worked extremely hard to build an efficient organization—executing well on cross-margining, maintaining a stable API, and avoiding downtime. But I think that operational efficiency extends to other areas too, like compliance, which we’ve prioritized since day one. We’ve always had KYC (Know Your Customer) on our platform and carefully excluded certain jurisdictions. For instance, we’ve always kept the U.S. out of FTX International. Some people assume there’s a trade-off between building great products and building compliant platforms—you have to pick one, you can’t have both. But I think the way most exchanges launched around 2018 is very different from what we’re doing now. Back then, we saw many exchanges simply rebrand generic tech, without careful thought or hiring compliance staff, then immediately spend heavily on marketing. That’s a good way to grow fast in the short term, but it doesn’t help build sustainable products or long-term growth.
Forbes: Let’s discuss some recent developments. FTX recently made headlines by raising $900 million in private funding, valuing the company at $18 billion. I know this gives you firepower for M&A. What’s your strategy, or what kind of companies are you looking to acquire to strengthen the FTX platform?
SBF: There are several different angles. One is identifying companies that already have large, loyal user bases but aren’t necessarily fintech firms—they often lack the expertise to build the trading products their users want. On the other hand, I also see value in compliance-driven acquisitions, depending on what else the company brings beyond just a license. Third, we expect some industry consolidation, which I believe is healthy and long overdue. I also anticipate acquiring other companies related to trading.
Forbes: Do you have ambitions to go public in the near future?
SBF: Maybe. We’ve seriously considered it. Ultimately, we decided it’s not the right time, especially given shifts in public markets. But if going public seems like the right move for the business, we want to be ready to do it. We don’t need to—we’re profitable and don’t face existential crises. Still, I believe going public could be beneficial for the company. One other point: we haven’t sought any liquidity events or cash-out paths, so that particular motivation for IPOs doesn’t apply to us.
Forbes: I’d like to discuss your relationship with Solana. Though you’re not a founder, you’re closely associated with the platform. Could you clarify this? And why do you think its native token SOL has been rising in price recently?
SBF: You can think of me as a fan of Solana. I think it’s a really cool product. I won’t claim it’s guaranteed to win, because I don’t think it is. But I do believe that among existing blockchains, it may be the only one—or at least one of very few—that can support massive-scale applications. Take your favorite consumer-facing big tech company—they likely process between 100,000 and 10 million internal transactions per second. When you ask which blockchain could host a large application, Solana becomes a top candidate. And I think few blockchains have that kind of roadmap—but Solana does.
Forbes: Regarding your DEX Serum, can you share its development plans? Is there any real possibility it could surpass centralized exchanges in some way?
SBF: I believe Serum has unlimited potential. For a DEX, it can be scalable, and we can have an order book instead of relying solely on AMMs. Building this on-chain isn’t easy, so you need a blockchain with sufficient scalability. That’s why building Serum on Solana was our best option.
Forbes: You’ve previously talked about giving away all your wealth. Do you have any formal plans for doing so, or have you already made meaningful donations using the wealth you’ve accumulated so far?
SBF: “Meaningful” is relative. I don’t think I’ve done many charitable projects yet—I’ve probably donated around $30 million so far. Building infrastructure is something I’m quite actively working on, but it’s hard to dedicate as much time as I’d like. So I see this as something that will take time to mature. And honestly, it’ll take time before I can fully act on it. Right now, frankly, my wealth isn’t very liquid. The figures you see online mostly reflect equity and locked tokens. So it’s a long-term goal. But I do believe it’s important to allocate a reasonable amount now—to prove to myself that it’s real and valuable.
Forbes: Before former Binance.US CEO Brian Brooks abruptly resigned in early August, I had the chance to interview him. One of the more interesting things he told me was his core belief that, due to increasing competition, exchanges are ultimately unprofitable businesses in the long run. How do you respond to that?
SBF: I’m not necessarily bullish on the long-term prospects of businesses that are just matching engines. So I agree there’s some truth to that. But crypto presents a powerful counterexample, because crypto exchanges are full-stack businesses—they’re not just about trading.
Forbes: Finally, tokenized stocks are gaining increasing public attention but also attracting heavy regulatory scrutiny. What’s your outlook on the future of such products? And how does the value proposition of tokenized stocks differ across geographies?
SBF: Two points. First, please note that our stock offerings are currently on FTX International, not FTX.US. There are many countries whose stock markets are nearly nonexistent. Frankly, those places need tokenized stock services—and that’s exactly what we’re building at FTX. This allows us to make stock market access easier, especially in underserved regions. The situation in the U.S. is different. From that perspective, if we were to offer stock-related services on our platform, the main goal—at least initially—would simply be to have a product somewhat similar to what exists elsewhere, but integrated into the same platform where users already access their crypto and other features we’re building. Because switching between platforms is painful—you have to manage passwords, logins, and everything across multiple apps. That’s another benefit. So I see this as a vision—for example, offering tokenized stocks in the U.S.
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