This memo was written from the 2021 deck and the sources available then. Nothing that happened later was used.
Verdict
Confidence · Highnothing here reopens it
Custody opacity is the dealbreaker.
The deck discloses no custody mechanics and no round terms. At $14.7B average daily volume, the absence of any statement on whether customer assets are segregated from FTX operating capital is the central risk, not a diligence footnote, and no investor can responsibly commit capital without audited proof of segregation and a term sheet.
Why this stage
The one blocker
Customer funds segregation never disclosed.
FTX's $1.2B ARR and fourth-largest global exchange ranking establish a credible large-outcome trajectory, but the category does not concentrate on a single winner, Binance's dominance and Coinbase's regulatory moat in the US mean the market splits rather than tips.
What moves this grade
The grade would move to 9 if FTX US achieves full derivatives licensing and begins compounding the retail-to-institutional flywheel in the largest single market.
A $1.2B annualized revenue run rate and $800M estimated profit achieved with a 75-person team implies a revenue-per-employee ratio that is materially above any public exchange comparable at this stage, though the profit figure is unaudited.
What moves this grade
A Big Four audit confirming the margin profile would move this to 9.
Sam Bankman-Fried and Gary Wang built Alameda Research as a functioning market maker before founding FTX in 2019, then scaled from $50M ADV in the first few months to $14.7B ADV by 2021, a build-and-scale arc that is among the fastest in the exchange category.
The cross-margining wallet is a genuine product differentiator that creates real switching costs for sophisticated traders, but it is an engineering advantage rather than a structural lock-in, and a well-funded competitor with the will to build it could reach parity within 12-18 months.
What moves this grade
The moat would move to 7 if FTX demonstrates that the cross-margining wallet produces measurable retention lift in cohort data, evidence that switching costs are real rather than theoretical.
Deck does not disclose the current funding round being raised: no round name, amount, valuation, or investor information provided.
Slide 3 states $800M estimated profit in 2021 with asterisk noting 'numbers are approximate, based on recent performance. They do not incorporate any additional growth.' This qualifier undermines the precision of the headline traction figures.
Deck claims FTX is the 'fourth largest crypto exchange' globally by volume (slide 2) but also 'largest non-Chinese crypto exchange' (slide 2). These two claims are consistent only if three of the top four exchanges are Chinese, which is not verified in the deck.
Do next
Pass pending audited financials and custody proof.
Audited financials confirming the $800M profit figure, a written proof of customer fund segregation from a Big Four auditor, and a term sheet with round size and governance terms would reopen this as an Invest conversation.
The full memo
The complete read, with the market and diligence, is built for desktop. Open Verdict on a computer for the full analysis.
Verdict
PASS
Confidence · High · nothing here reopens it
Custody opacity is the dealbreaker.
The deck discloses no custody mechanics and no round terms. At $14.7B average daily volume †, the absence of any statement on whether customer assets are segregated from FTX operating capital is the central risk, not a diligence footnote, and no investor can responsibly commit capital without audited proof of segregation and a term sheet.
Deck does not disclose the current funding round being raised: no round name, amount, valuation, or investor information provided.
This is a pitch deck with no stated ask. A lead investor cannot determine the round size, terms, or valuation.
Slide 3 states $800M estimated profit in 2021 with asterisk noting 'numbers are approximate, based on recent performance. They do not incorporate any additional growth.' This qualifier undermines the precision of the headline traction figures.
The profit figure is explicitly approximate and does not account for growth, limiting its reliability as a current-state metric.
Deck claims FTX is the 'fourth largest crypto exchange' globally by volume (slide 2) but also 'largest non-Chinese crypto exchange' (slide 2). These two claims are consistent only if three of the top four exchanges are Chinese, which is not verified in the deck.
The ranking claims are internally consistent but depend on an unstated assumption about Chinese exchange dominance.
What moves this grade
The grade would move to 9 if FTX US achieves full derivatives licensing and begins compounding the retail-to-institutional flywheel in the largest single market.
What moves this grade
A Big Four audit confirming the margin profile would move this to 9.
Sam Bankman-Fried and Gary Wang built Alameda Research as a functioning market maker before founding FTX in 2019, then scaled from $50M ADV in the first few months to $14.7B ADV by 2021 †, a build-and-scale arc that is among the fastest in the exchange category.
The cross-margining wallet is a genuine product differentiator that creates real switching costs for sophisticated traders, but it is an engineering advantage rather than a structural lock-in, and a well-funded competitor with the will to build it could reach parity within 12-18 months.
What moves this grade
The moat would move to 7 if FTX demonstrates that the cross-margining wallet produces measurable retention lift in cohort data, evidence that switching costs are real rather than theoretical.
Each axis is scored from 1 to 10 against a fixed rubric, and the letter is shorthand for that number. A 5 or 6 reads as B, which means the company meets the bar for its category on that axis without clearing it. No band is a default and no band is a target: every company is read on its own evidence, and thin evidence is not a reason to sit in the middle, it is something the reasoning has to name. The outer bands have to be earned: a strong grade needs named, defensible evidence, and a failing grade needs a concrete flaw that capital alone cannot fix. Grades judge the company on its own merits. Whether the company fits a particular investor is judged separately, in the verdict. The reasoning under each grade is anchored in what the deck disclosed, plus outside research where cited.
Biggest risk
The deck never discloses whether customer assets are segregated from FTX operating capital †, and at $14.7B average daily volume † that omission makes the solvency question unanswerable from the deck alone.
Best reason
FTX's founding team built the trading infrastructure at Alameda Research before building the exchange, giving them a founder-operator fit that is rare in crypto and that produced $1.2B in annualized revenue by 2021 †.
Would change mind
Audited financials confirming the $800M profit figure, a written proof of customer fund segregation from a Big Four auditor, and a term sheet with round size and governance terms would reopen this as an Invest conversation.
Why this verdict
Custody and flow-of-funds mechanics entirely absent from the deck, the single most dangerous undisclosed fact at this volume scale †
Profit figures explicitly approximate and unaudited, with the deck's own disclaimer undermining the headline †
No round terms disclosed, round name, amount, valuation, and governance rights are all absent †
Investment thesis
FTX is correctly positioned at the intersection of two structural shifts: institutional capital entering crypto at scale and Western regulators beginning to differentiate between compliant and non-compliant exchanges.
6M+ downloads [2] acquired August 2020 for $150M gives FTX a retail onboarding channel it did not have to build from scratchThe strongest argument
The thesis holds. The disclosure does not.
GP summary
FTX is the most impressive growth-stage crypto deck in the 2021 cohort on raw numbers.
Non-Chinese exchange riding 2021 institutional crypto inflection.
Key strength
75x volume growth; $1.2B ARR; quant-trader founding team.
Key risk
Customer fund segregation never disclosed in deck.
Signal
Real revenue scale; custody mechanics undisclosed; round terms absent.
Round size
Not disclosed
Valuation
Not disclosed
Lead status
Not disclosed
Allocation available
Not disclosed
Pro-rata rights
Not disclosed
Board seat
Not disclosed
Use of proceeds
Not disclosed
Pass on current disclosure.
The 2021 crypto bull market drove a structural shift in institutional participation: total crypto market capitalization exceeded $2 trillion for the first time in 2021, and derivatives volume at the top exchanges reached multi-trillion-dollar monthly figures [3]. This created demand for exchange infrastructure sophisticated enough to serve both retail and institutional participants simultaneously, a gap FTX's unified wallet and cross-margining architecture is specifically designed to fill.
What’s helping
What’s in the way
$800M profit figure is approximate and does not incorporate additional growth †. No audited financials were surfaced.Timing risk.FTX is correctly timed to the 2021 institutional crypto inflection, but the window is narrow: if Western regulators move to restrict derivatives or tokenized equities before FTX achieves sufficient scale and regulatory entrenchment, the product suite that differentiates it from Coinbase becomes a liability rather than an advantage.
Value proposition
Unified cross-margin wallet across futures, spot, OTC, tokenized equities.
Business model
Transaction fees; 75% from crypto futures trading.
Funding
$900M Series B at $18B post-money; current round undisclosed.
Not disclosed
Product
FTX is a multi-product digital assets exchange offering: (1) Futures trading with 75% of revenues; (2) Spot trading supporting T1 Layer 1 assets; (3) Leveraged tokens based on partner exchanges; (4) OTC portal and RFQ system with…
FTX is a multi-product digital assets exchange offering: (1) Futures trading with 75% of revenues; (2) Spot trading supporting T1 Layer 1 assets; (3) Leveraged tokens based on partner exchanges; (4) OTC portal and RFQ system with growing volume; (5) Spot margin trading and P2P lending launched November 2021; (6) Tokenized stocks in partnership with CM-Equity, a licensed broker-dealer in Germany. All products accessible through a single wallet with cross-margining capability.
Built systems for order-book management, matching services, API connectivity, and full-service settlement infrastructure. Integrated retail trading via Blockfolio app acquisition.
Platform vs. pointPlatform play. FTX positions itself as the infrastructure layer of crypto, offering multiple product lines (futures, spot, leveraged tokens, OTC, margin, tokenized equities, prediction markets) accessible through a unified wallet with cross-margining.
Founding arc
In 2017, the core team entered crypto and launched a market maker. After years of using other exchanges and identifying structural gaps, the team founded FTX in 2019 to build a better exchange. The company rapidly scaled from $50M ADV in the first few months (2019) to $16-158B ADV by May 2021, becoming the largest non-Chinese crypto exchange by volume.
Team · 75 people
Sam Bankman-Fried
CEO
Worked at Alameda Research and Jane Street Capital on international ETF deals.
Profile found
Open profileGary Wang
CTO
Software engineer at Google prior to founding Alameda and FTX.
No profile found
Nishad Singh
Head of Engineering
Software engineer on Facebook's Applied Machine Learning team.
No profile found
Dan Friedberg
General Counsel
Partner at Fenwick & West LLP prior to joining FTX.
No profile found
Ramnik Arora
Head of Product
Joined FTX from Facebook, where he built side products.
No profile found
Sam Bankman-Fried · CEO
Worked at Alameda Research and Jane Street Capital on international ETF deals. Traded a variety of ETFs, futures, commodities, and equities. Graduated from MIT with a degree in physics.
FitDeep experience in quantitative trading and derivatives markets from Jane Street and Alameda; built trading systems and infrastructure before founding FTX.
Gary Wang · CTO
Software engineer at Google prior to founding Alameda and FTX. Built systems to aggregate prices across millions of flights, decreasing latency and memory usage. Graduated from MIT with a degree in Mathematics with Computer Science.
FitStrong systems engineering background from Google; built infrastructure for high-scale, low-latency systems before leading FTX engineering.
Nishad Singh · Head of Engineering
Software engineer on Facebook's Applied Machine Learning team. Graduated with a degree in Electrical Engineering and Computer Science.
FitExperience building machine learning systems at scale at Facebook; now Director of Engineering at FTX.
Dan Friedberg · General Counsel
Partner at Fenwick & West LLP prior to joining FTX. Chair of the Payment Systems group, specializing in regulatory and compliance matters for publicly traded companies in manufacturing, financial services, biotechnology, gaming and software. Received his J.D. from the University of Chicago.
FitDeep regulatory and compliance expertise from leading law firm; positioned to navigate crypto regulatory landscape.
Ramnik Arora · Head of Product
Joined FTX from Facebook, where he built side products. Also on the Facebook Libra team and was a co-author of the whitepaper. Prior to Facebook, Ramnik was at Investment Management at Goldman Sachs and worked at McKinsey.
FitProduct experience at Facebook and financial services background from Goldman Sachs and McKinsey; led product innovation at FTX.
Team of 75 and growing. Leadership team includes experienced hires from Google, Facebook, Goldman Sachs, McKinsey, and Fenwick & West LLP.
Traction
Market sizing
$1.2B annualized run rate † already exceeds the $329M figure that syndicated research firms assign to the 'cryptocurrency exchange platform' category in 2021, a discrepancy that signals those reports measure exchange software licensing revenue, not trading fee revenue. A credible TAM for the trading-fee pool was not surfaced from a primary statistical source for 2021.$1.2B † is the most reliable proxy for its current revenue capture. The deck does not state a forward SOM target.How each figure was built
Not established
Global cryptocurrency exchange trading fee revenue, 2021
Not established
Non-US global cryptocurrency exchange trading fee revenue, 2021
Not established
FTX's realistic revenue capture from global crypto exchange fee revenue over a 3-year horizon
Not established
The deck states no TAM figure. The most relevant market is global cryptocurrency exchange fee revenue. The deck's own $1.2B annualized run rate † already exceeds the $329M figure that syndicated research firms assign to the 'cryptocurrency exchange platform' category in 2021, a discrepancy that signals those reports measure exchange software licensing revenue, not trading fee revenue. A credible TAM for the trading-fee pool was not surfaced from a primary statistical source for 2021.
No TAM stated in the deck. Syndicated research figures for 2021 are inconsistent with FTX's own disclosed revenue run rate, suggesting they measure a different and narrower market definition. The figure could not be established from a primary source.
GrowthThe broader crypto trading volume grew dramatically through 2021, with Binance alone reporting over $2 trillion in monthly derivatives volume in June 2021 [3]. No authoritative CAGR for exchange fee revenue was surfaced for the 2021 period.
SourceNot established from a primary source; syndicated figures (Vantage Market Research, Zion Market Research) appear to measure exchange software revenue, not fee revenue, and are inconsistent with FTX's own disclosed run rate
Not established
FTX targets global retail and institutional crypto traders outside the US (FTX Inc. blocks US customers; West Realm / FTX US serves US users separately). The SAM would be non-US global crypto exchange fee revenue, but no primary source breaks this out for 2021.
Not established. FTX's geographic scope (non-US for FTX.com) narrows the TAM, but no primary source quantifies the non-US share of global crypto exchange fee revenue for 2021.
SourceNot established from a primary source
Not established
FTX's current annualized run rate of $1.2B † is the most reliable proxy for its current revenue capture. The deck does not state a forward SOM target.
Not established. The deck's $1.2B annualized run rate † is the best available anchor for current revenue capture, but a forward SOM requires assumptions about market share trajectory and total fee pool size, neither of which is established.
Supporting data points
Caveats
$329M for the 'cryptocurrency exchange platform market' in 2021 appear to measure software licensing revenue, not trading fee revenue, a category so narrow that FTX's own $1.2B ARR † already exceeds it, making those figures useless as a market ceiling.Market analysis
The 2021 crypto bull market created a structural demand shift that FTX is correctly timed to capture, but the deck states no TAM, SAM, or SOM.
Competitive analysis
FTX's primary competitive frame, that the three largest exchanges above it are Chinese-founded, is the most defensible positioning claim in the deck.
Competitive position
Funding · max-of-disclosedNot plottedFTX (no funding disclosed); OKEx (Privately held; no primary funding ro…); Huobi Global (Privately held; no primary funding ro…); Coinbase (Publicly listed (COIN, Nasdaq, April …)
Competitive set
The world's largest cryptocurrency exchange by volume as of 2021, with over $2 trillion in monthly derivatives volume in June 2021 [3]. Binance dominates global spot and derivatives markets and was FTX's first external investor before divesting its stake in July 2021. Binance is China-founded and operates globally, which is the basis for FTX's 'largest non-Chinese exchange' positioning †.
Ships
Funding / scale
Privately held; no disclosed funding round. Revenue estimated in the billions for 2021 based on volume dominance.
Strength.Dominant global volume, broadest token listings, deepest liquidity, first-mover brand recognition across retail and institutional segments.
Gap.China-founded origin creates regulatory exposure in Western markets; less focused on institutional-grade structured products and compliance positioning than FTX.
China-based exchange ranked #2 in derivatives volume in May 2021 with approximately $999 billion in monthly derivatives volume [3]. OKEx is one of the three Chinese exchanges that FTX's deck implicitly identifies as ranking above it globally †. Offers spot, margin, futures, perpetual swaps, and options.
Ships
Funding / scale
Privately held; no primary funding round data surfaced for 2021.
Strength.Second-largest derivatives venue globally in mid-2021; deep liquidity in BTC and ETH perpetuals; strong Asia-Pacific retail and institutional base.
Gap.China-based regulatory exposure; less developed compliance and institutional onboarding infrastructure compared to FTX's stated positioning.
China-founded exchange, one of the three Chinese exchanges that FTX's deck implicitly identifies as ranking above it globally †. In May 2021, Huobi's spot volume was approximately $271 billion for the month [3], and its derivatives volume was approximately $536 billion [3]. Historically the largest exchange by adjusted volume before Binance's rise.
Ships
Funding / scale
Privately held; no primary funding round data surfaced for 2021.
Strength.Long-established brand with deep Asia-Pacific retail penetration; broad token listings; strong OTC desk.
Gap.China-founded regulatory exposure; declining relative market share versus Binance and OKEx by mid-2021.
The largest US-regulated cryptocurrency exchange, which completed its Nasdaq direct listing in April 2021. Coinbase reported approximately $335 billion in spot trading volume in Q1 2021 [4]. Coinbase is a participant in FTX's Series B round, making it simultaneously a competitor and investor. Coinbase is retail-focused and US-centric; it does not offer the derivatives, leveraged tokens, or prediction markets that FTX ships.
Ships
Funding / scale
Publicly listed (COIN, Nasdaq, April 2021). No private funding round relevant to 2021 competitive context.
Strength.US regulatory compliance, brand trust, and retail distribution; publicly listed with deep institutional credibility; largest US exchange by volume.
Gap.No derivatives or futures products for US retail users as of 2021; higher fees than FTX; limited international product breadth.
Moat assessment
Primary competition. Large incumbents (Binance, OKEx, Huobi) and adjacent regulated players (Coinbase). FTX's primary competitive frame is that the three largest exchanges above it are Chinese-founded, creating a structural opening for a non-Chinese exchange with institutional-grade infrastructure and Western regulatory positioning.
Durability. The cross-margining architecture and compliance infrastructure are durable over a 2-3 year horizon because they require sustained engineering investment and regulatory relationships to replicate.
$1.2B annualized revenue run rate (2021)Assessment
Plausible given the volume figures and competitive ranking. The run rate is directionally consistent with FTX's stated ADV and its position relative to Coinbase's disclosed revenue. The absence of audited financials prevents a harder verdict.
Coinbase (COIN) reported $7.4B in net revenue for full-year 2021 (SEC 10-K filing). CME Group reported approximately $4.7B in revenue for 2021. FTX's $1.2B run rate places it at roughly 16% of Coinbase's 2021 revenue, consistent with its fourth-largest-by-volume positioning.
$800M estimated profit on $1.2B revenue (implied ~67% profit margin)Assessment · weak
Suspicious without an audit. The margin is not impossible for a lean exchange with high-volume institutional flow, but the deck's own disclaimer that the figure is approximate and excludes growth effects makes it unreliable as an investment anchor. The implied operating cost of ~$400M (derived) for a 75-person operation warrants a line-by-line reconciliation.
CME Group operates at roughly 50-55% net income margin on exchange revenue. ICE runs at approximately 30-35% net margin inclusive of data and listings businesses. A pure derivatives exchange at scale can achieve high margins, but 67% implied net margin at FTX's stage, with a 75-person team and global infrastructure, is at the high end of any public exchange comparable.
75.2x volume growth between start of 2020 and May 2021Assessment · strong
Credible in direction, unverifiable in precision. Starting from a small 2019 base, 75x volume growth during the 2020 crypto bull run is plausible. The figure is founder-stated and unaudited. The more meaningful metric, whether volume growth translated proportionally to fee revenue, is not disclosed.
No published benchmark exists for exchange volume growth rates at this stage and in this asset class. The nearest directional reference is Coinbase, which grew trading volume approximately 10x over the same period (2020) based on its S-1 and 10-K disclosures. FTX's 75x figure is dramatically higher, which is consistent with starting from a much smaller base in 2020.
No comparable scale (non-percentage metric)
Assessment · strong
Credible. The volume figures are internally consistent with the competitive ranking claim. The deck's qualifier that FTX is the largest non-Chinese exchange is the more defensible claim, given that Binance, OKEx, and Huobi Global all had Chinese origins and dominated global volume rankings in 2021.
Binance reported $2.46 trillion in monthly derivatives volume in June 2021 [3]. FTX's $14.7B ADV implies roughly $440B monthly volume (derived), placing it materially below Binance but consistent with a top-five global ranking in derivatives.
No comparable scale (non-percentage metric)
Severity distribution
8 risks surfacedRisk analysis
Four risks bind at this stage; the first is the reason for the pass.
The deck never explains who holds customer funds, how trading fees convert to profit, or whether customer assets are segregated from operating capital †. At $14.7B average daily volume, undisclosed custody mechanics represent a potential systemic failure point.
Mitigant.None identified.
The deck states no round name, raise amount, valuation, or investor terms †. A lead investor cannot price the round or assess governance protections against the $18B post-money Series B valuation already set in July 2021.
Mitigant.Request a term sheet or data room with cap table, round size, and governance terms before any further diligence.
FTX.com explicitly blocks US customers but operates globally across jurisdictions with rapidly evolving crypto regulation †. The deck names West Realm as the US-regulated entity but does not enumerate which licenses FTX Inc. itself holds in each operating jurisdiction.
Mitigant.Dan Friedberg (General Counsel, ex-Fenwick & West) and stated AML/KYC infrastructure provide some compliance scaffolding †.
The deck's own asterisk states $800M estimated profit is 'approximate, based on recent performance' and 'does not incorporate any additional growth' †. No audited financials, no third-party verification, and no gross margin disclosure accompany a $1.2B annualized run rate claim.
Mitigant.Require audited financials and a reconciliation of trading fee revenue to net profit before any commitment.
75% of revenues come from futures on crypto assets †, which are highly correlated with crypto price cycles. A sustained bear market compresses both volume and fee rates simultaneously, as seen in prior crypto winters.
Mitigant.Product diversification into tokenized equities, prediction markets, and OTC partially reduces pure crypto-cycle exposure †.
Binance reported over $2.46 trillion in monthly derivatives volume in June 2021 [3], against FTX's $14.7B average daily volume †. Binance's scale advantage in liquidity depth and fee subsidization is difficult to close without matching capital deployment.
Mitigant.FTX's institutional product depth and cross-margining wallet differentiate on product quality rather than competing on fee price alone †.
The deck discloses no customer count, no retention rate, and no NRR †. A $1.2B run rate concentrated in a small number of high-volume institutional traders would be far more fragile than the same revenue spread across a broad retail base.
Mitigant.Require cohort data and top-10 customer revenue concentration before diligence proceeds.
Sam Bankman-Fried is the public face, trading architect, and primary relationship holder for FTX's institutional counterparties †. No succession plan or governance structure is disclosed.
Mitigant.The leadership team includes Gary Wang, Nishad Singh, and Ramnik Arora with credible independent backgrounds †, providing some bench depth.
Bull case · What has to go right
Crypto market volumes must remain elevated, custody and flow-of-funds must prove clean under audit, regulatory licenses must hold across operating jurisdictions, and Binance must not compress fee rates to the point of margin destruction.
Bear case · What could go wrong
Customer funds are not segregated from operating capital, a regulatory action forces withdrawal from a key jurisdiction, crypto volumes collapse in a bear market, and the $800M profit figure proves to have been materially overstated.
Failure modes the partner would catalogue
Customer funds are commingled with Alameda Research operating capital; a liquidity event at Alameda triggers a run on FTX customer deposits that the exchange cannot meet, resulting in insolvency and regulatory shutdown.
A sustained crypto bear market compresses derivatives volume by 80%+ from 2021 peak levels, collapsing the 75%-futures revenue base † and making the $18B Series B valuation [4] indefensible, forcing a distressed recapitalization or wind-down.
German or EU regulators extend the scrutiny that forced Binance to shut down its tokenized stock product in July 2021 to FTX's CM-Equity partnership [5], eliminating a key product differentiator and triggering broader regulatory review of FTX Inc.'s operating licenses.
The $800M profit figure † proves materially overstated once audited, revealing that the implied ~67% margin (derived) was achieved through accounting treatment that does not survive external review, destroying the valuation anchor for the current round.
Binance deploys its liquidity advantage to subsidize fees below FTX's cost floor in key derivatives pairs, eroding FTX's institutional client base faster than the Blockfolio retail channel can replace the volume [3].
Diligence asks before taking the meeting.
Where do customer funds sit? Are customer assets held in segregated accounts, separate from FTX operating capital and the Alameda Research balance sheet? Provide a Big Four auditor's attestation or a proof-of-reserves report.
CriticalThe deck never addresses custody mechanics †. At $14.7B average daily volume †, commingling of customer funds with operating capital would be an existential solvency risk. This is the first question any lead investor must answer before proceeding.
What are the current round terms? Provide the round name, raise amount, pre-money valuation, cap table, and governance rights being offered.
CriticalThe deck states no round details anywhere †. A lead investor cannot assess dilution, governance protections, or pricing against the $18B post-money Series B valuation set in July 2021 [4] without a term sheet.
Provide audited financial statements for FY2020 and the most recent available period in 2021. Specifically: gross revenue by product line, operating costs broken down by category, and net income reconciled to the $800M estimated profit figure †.
CriticalThe deck's own asterisk flags the $800M figure as approximate and excluding growth effects †. The implied ~67% profit margin (derived) is at the high end of any public exchange comparable, including CME Group (~50-55% net margin). An unaudited figure at this magnitude cannot anchor a valuation.
The deck never states these. Verdict left them blank rather than estimating them, so no figure in this memo was filled in from a guess.
Retention rate or net revenue retention not disclosed
Specific pricing structure (trading fees, OTC spreads, margin rates) not detailed
Gross margin or operating margin figures not provided
Detailed customer acquisition cost or lifetime value metrics not disclosed
Breakdown of revenue by product line beyond 'futures = 75%' not provided
Geographic revenue split or customer distribution not disclosed
Specific compliance licenses held (e.g., MSB status, broker-dealer licenses) not fully enumerated
Custody and settlement mechanics not explained
Current funding round details not disclosed: round name, amount, valuation, lead investor, or terms
Customer count or user base size not provided
6 cited
† founder-stated, from the pitch deck · numbered sources are independently verified third parties
The research runs on the day the memo is written, so a source can be published after the deck.
About this memo
Verdict picked this company and ran the memo on its pitch deck. You are reading it in full, as it came out, with no edits after the fact. Because the company is one you can look up, the call is yours to judge rather than take on trust. Verdict is not affiliated with it, and a memo is a view formed from one deck at one moment.
Something look wrong? info@useverdict.io