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- FTX's breakout year
GM, and welcome to RollCall by Rollfi!
Get caught up from the past week in 10 minutes or less:
FTX 10x'd in 1 year 🚀
SEC Chairman's opinion on crypto ⚖️
Other stories from the week 📰
FTX’S FINANCIALS LEAKED
Over the week, CNBC got ahold of leaked financials from the giant, private crypto exchange, FTX. Figures in the audited financials were staggering. Here are some of the highlights:
Revenues grew from $89M in 2020 to over $1B in 2021
Net income for increased from $17M to $388M in the same timeframe
They had $2.5B of cash on hand at the end of the year
Profit margins were 27% for 2021
FTX U.S., the company’s United States platform only accounted for 5% of all revenues
66% of all revenues came from derivative products like futures and options
With a $32B valuation as of their last funding in January, they are valued higher than Coinbase is today. By comparison, Coinbase had $7.6B in revenues in 2021.
Although private market values are not as liquid as those on the public markets, the contrast in revenues and valuation shows the difference in investor sentiment between the two firms.
FTX has acquired 15 companies across the globe to date as well, differentiating their revenue streams and bolstering their offerings. Although 2022 has seen a massive dip in crypto markets, the company expects a slight improvement in revenues year-over-year to $1.1B according to an investor deck.
GENSLER'S MESSAGE TO THE CRYPTO MARKETS
Late last week, SEC Chairman Gary Gensler published an opinion article in the Wall Street Journal.
In his piece, he compared motor vehicles to investment vehicles, saying that consumers and investors alike deserve protection. Motor vehicles are required to comply with federal safety laws and securities have to comply with federal securities laws. Here's what he had to say about crypto markets:
Recent bankruptcies in the crypto markets have left investors waiting in line for their accounts to be unfrozen or get their money back through the court
If a platform offers a return on assets, it doesn't matter what the asset is, ("cash, gold, bitcoin, chinchillas") (LOL), what that platform does with the asset determines whether it needs to comply with those securities laws
He says that many crypto lending platforms are acting as if they have they have a choice to comply or worse, saying "catch me if you can"
Our take: Lending platforms are one thing, and investors definitely need protections and disclosures to keep them safe. However, guidance still isn't clear on how most cryptocurrencies themselves will be treated, as the CFTC and SEC battle for control. Seems like a 'them' issue.
In the meantime, enjoy this incredibly creepy DALL-E produced image of Gary Gensler holding a chinchilla. Sorry for the nightmare fuel.
HOT OFF THE PRESS
Crypto trader doubles portfolio in a month betting against Jim Cramer - The popular crypto trader Algod turned $50k to $100k in one month by doing the exact opposite of whatever Jim Cramer said.
Co-CEO of Crypto Trading Firm Alameda Research Sam Trabucco Steps Down - He said on Twitter that he bought a boat and "that's been cool". I imagine it has.
Arthur Hayes, also known as Crypto Hayes, wrote this great piece on what the merge may do to the price of ETH, and how traders can manage their risk.
Tether Sticks to Decision Not to Bar Tornado Cash Addresses - They are awaiting direct contact from OFAC before any decisions are made.
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