FTX generated record revenue of more than $1 billion in 2021

Last year, Sam Bankman-Fried’s crypto exchange FTX saw tremendous growth, with its revenue soaring by 1,000% from $89 million to $1.02 billion throughout the 2021 bull run.

Floating piggy banks in neon light, stock image.

FTX’s audited financials leaked to CNBC offer a rare insight into the finances and profitability of SBF’s empire. In 2021, when Bitcoin and other cryptocurrencies hit their all-time highs, FTX rode the bull market to revenue exceeding $1 billion, while its operating income increased by a staggering 1842.85%, from $14 million to $272 million. The net income reportedly grew from $17 million to $388 million.

“Fwiw [for what it’s worth] numbers here are correct ballpark,” Sam Bankman-Fried tweeted in replies to CNBC’s article.

According to the documents, the exchange had a considerable revenue of $270 million in Q1 2022, but it’s unclear how well it held up in the following months as cryptocurrency prices plummeted, and its overall market cap dropped below $1 trillion. However, an investor deck shared with CNBC stated that the company is on track to bring about $1.1 billion in revenue in 2022, meaning that FTX is about to exceed its previous year record-breaking achievements despite extremely unfavorable market conditions.

Amid booming revenues, FTX focused on expanding its network of global subsidiaries, putting up $1 billion for bailouts and acquisitions. In June alone, the exchange bought two companies, rescued troubled crypto lender BlockFi, and offered to purchase beleaguered Voyager Digital. The latter, however, rejected the deal and called SBF’s offer “a low-ball bid dressed up as a white knight rescue,” questioning his public image of a selfless philanthropist who comes to the rescue of the crypto industry.

In 2021, FTX spent roughly 15% of its revenue on advertising and marketing, paying for endorsements from high-profile celebrities and buying the naming rights to Miami’s NBA arena. The company also plans to spend an estimated $900 million in advertising in the coming years, documents reveal. However, such a flurry of activity didn’t come unnoticed by regulators – on August 19, FDIC sent FTX a cease-and-desist letter, telling the company to refrain from misleading claims about the insurance status of its customers’ funds.

“Based upon evidence collected by the FDIC, each of these companies made false representations —including on their websites and social media accounts — stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured,” the regulator’s press release read.

The statement that caught the attention of FDIC was a tweet by Brett Harrison, the president of FTX.US, who stated that direct deposits from employers are stored in FDIC-insured accounts. Since then, Harrison deleted his post and apologized for unintentionally misleading the public, saying that he just meant that “USD deposits from employers were held at insured banks.”