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Pastimes : The New Qualcomm - write what you like thread.

QCOM 177.78

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Jan 9 9:30 AM EST

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From: Bill Wolf

7/23/2021 8:45:03 AM

of 12247

Sam Bankman-Fried, the C.E.O. and majority owner of FTX, is worth at least $8 billion, on paper.Lam Yik Fei for The New York Times

Crypto’s big money is made offshore

Some of the world’s most important cryptocurrency exchanges — platforms like Binance and FTX — are not based in the United States. Yet their founders grew up in North America and trace their professional roots to Wall Street.

American regulations prevent these trading moguls from offering cryptocurrency investors’ favorite products, so they have gone abroad, where the rules are more permissive about the riskiest types of transactions. And they will keep moving to avoid crackdowns, Eric Lipton and DealBook’s Ephrat Livni report for The Times.

“It needed a non-U.S. base of operations,” said the FTX founder and C.E.O. Sam Bankman-Fried of his platform, which operates from Hong Kong. “The most important part for us — and I think for a lot of the industry as a whole — is derivatives,” he said. FTX specializes in this kind of transaction, which is off limits to U.S. retail traders. The exchange raised $900 million this week to fund its global expansion, at an $18 billion valuation.

Derivatives exchanges allow traders to take on a large amount of leverage, up to 101 times on FTX and up to 125 times on Binance. That transforms a small down payment into a huge bet that can pay off big or lead to forced sales that set off cascading liquidations and influence the underlying cryptocurrency’s prices. Billions of dollars’ worth of investments from customers with ties to the U.S. has reached some offshore exchanges, despite the ban, according to trading data through last year.
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Crypto Nomads: Surfing the World for Risk and Profit
A new generation of industry leaders have set up offshore trading exchanges largely beyond the reach of American regulators.

nytimes.com

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