Traders at Jane Street are known to stay late, socialize over chess and go on outings to escape rooms. But above all, its leaders expect they will maintain a level of loyalty that was more common in Wall Street’s era of partnerships, when a firm’s interests always came first and discretion was paramount, according to people close to the company. Managers wouldn’t be comfortable with employees who form a clique or champion a competing calling.
At FTX, Bankman-Fried embraced a different approach, preaching effective altruism, a dedication to earning as much money as possible and then giving it all away. Eventually, he shacked up in a Bahamas penthouse with fellow employees, who in a number of cases dated coworkers.
While Jane Street shows off a code-breaking enigma machine, FTX had video games during work hours. Bankman-Fried himself was known to play League of Legends in key meetings.
And then there was his embrace of the spotlight.
Bankman-Fried’s Alameda made waves in 2019 after listing itself on the BitMex exchange’s leader board. It was a conspicuous move even by crypto’s norms, with traders generally preferring nom-de-plumes in rankings to avoid attracting hackers or home-invasion robberies.
Contacted by a Bloomberg reporter at the time, Bankman-Fried said casting off anonymity was strategic -- a way of broadcasting his team’s clout in the market as it prepared to launch FTX. Two Alameda accounts were among the board’s top 10 most successful by lifetime profits.
Indeed, FTX’s ascent was rapid.
Late that year, venture capitalist Edith Yeung stopped by the Peninsula luxury hotel in Hong Kong to introduce a government official to Bankman-Fried, the then-27-year-old running her latest investment. He and his colleagues, awaiting another funding round, were renting a penthouse suite with a prime view of the city.
It was the middle of a party when Yeung arrived, she recalled in an interview with Bloomberg prior to the collapse of FTX. “I remember having this guy who’s suit-and-tie and when we walked in, they were playing beer pong,” said Yeung, a general partner at Race Capital. The official turned to her and asked, ‘“You invested in these kids?”’
As FTX’s market share soared, so too did Bankman-Fried’s public persona. Soon he was everywhere, directly addressing regulators and lawmakers, while FTX bought ads and the naming rights to a stadium.
In Bankman-Fried, authorities saw someone who could help bridge crypto and Wall Street. He launched into his congressional testimony at a hearing last December by mentioning his stint as a quantitative trader. Soon he boasted that his firm offered robust around-the-clock oversight of risk, which he said anyone could check by monitoring its data.
“Unlike the traditional financial ecosystem where risk builds up overnight, where there needs to be separate risk models for weekends and overnight activity and holidays, where hours can go by with no ability to mitigate risk to the system, we have a transparent system,” he said.