Before FTX collapsed, it was targeting retirement accounts

Early last year, cryptocurrency exchange FTX US was setting its sights on a vast pool of money: individual retirement accounts. 

“We have IRAs trading on FTX today, and are making a push to serve this segment,” Nate Clancy, FTX US’s vice president of business development, wrote in a March email to a New Jersey-based investment adviser, a copy of which was seen by Bloomberg News. Americans held more than $11 trillion in IRAs as of last year.  

The outreach, part of a multifaceted effort by the wider FTX Group to expand its base of everyday retail customers, casts light on the exchange’s sprawling ambitions in the months leading up to its implosion — and gives a glimpse into how the damage might have been even worse had the plans had longer to gestate. 

FTX and former chief executive Sam Bankman-Fried’s broader crypto empire collapsed in November. U.S. authorities allege he fraudulently used customer money to prop up his trading firm Alameda Research, leaving legions of clients high and dry when FTX went bankrupt. The charges center on the group’s global trading platform, but FTX US, its smaller unit for U.S. investors, was part of the bankruptcy. 

Every young company prioritizes growth, and prosecutors haven’t publicly assigned any sinister motives to the retail push, which seemed like a logical enough way for FTX to capture market share. But the allegations against Bankman-Fried underscore the perils of luring unsophisticated savers into a loosely regulated industry pushing highly volatile, opaque instruments, with often scant customer protections when things go wrong.

“It’s quite clear that FTX relied on continuous flows of new capital entering the platform, much like many other financial schemes, and marketing to retail was the most expedient way to attract those flows,” said Cory Klippsten, chief executive at crypto startup Swan Bitcoin. “It’s better that it blew up before it got bigger.”

Representatives for FTX didn’t respond to requests for comment. Mark Botnick, a representative for Bankman-Fried, declined to comment. The former executive, who was released on a $250 million bail package in December, pleaded not guilty Tuesday to the charges against him. Clancy, who hasn’t been accused of any wrongdoing, declined to comment. 

FTX, which amassed a loyal base of more experienced crypto investors, had made no secret of its desire to vie with Binance and Coinbase Global Inc. for retail customers — spending millions of dollars on Super Bowl ads, sponsorships and partnerships with celebrities like former supermodel Gisele Bundchen. 

The company hasn’t provided a public breakdown of how many retail clients it had or given growth targets for the segment. In March, the company said institutional investors such as hedge funds accounted for about two-thirds of trading on both the global and U.S. platforms. The bankruptcy filings for over 130 entities in the FTX Group listed more than a million creditors. 

In an annual report for 2021 which Bankman-Fried tweeted in January last year, the company said attracting individual investors was a key part of its growth strategy. The effort hinged on offering an easy-to-use app tailored to inexperienced traders. 

“Our goal is to create a retail-friendly app that allows for anyone to get involved, whether that’s through education, making their first crypto purchase, or exploring the burgeoning NFT ecosystem,” the FTX report said, using the acronym for nonfungible tokens.

FTX’s head of product Ramnik Arora played a key role in the push, according to people familiar with the matter. He spearheaded efforts to court retail-focused startups like Dave Inc., Stocktwits and, according to these people, who asked not to be named as the discussions were private. 

Arora spent five years at Facebook, where he worked on the social media giant’s defunct Libra digital currency project. He first met Bankman-Fried on an impromptu Zoom call, just a few minutes after connecting with him over LinkedIn, Arora said in a video interview in September 2021. Through his attorney, Arora declined to comment. He has not been accused of any wrongdoing.

That outreach was part of an initiative to accelerate its expansion through tie-ups with third-party apps. Financial technology companies from PayPal Inc. to Revolut Ltd. use similar agreements with other companies to allow users to buy and sell crypto on their apps, with the transactions executed on a digital-asset exchange. PayPal, for example, uses a company called Paxos. 

[More: FTX downfall damaging case for crypto in retirement accounts]


When Dave, a mobile-banking app founded in 2015 and based in Los Angeles, looked for a partner for expanding into crypto, more than 10 companies submitted proposals, according to a person with knowledge of the matter. But FTX — through its FTX Ventures investment arm — stood out by offering to invest $100 million in the startup through a convertible note. 

FTX US and Dave unveiled their partnership and the investment in March, but never launched any joint crypto services. Dave “is monitoring developments and will review how these impact its relationship with FTX going forwards,” a spokesperson said. 

FTX US continued to pursue partnerships, culminating with a deal with GameStop Corp. announced in early September — two months before the exchange spiraled into bankruptcy. In a press release that was light on details, the companies said FTX US would “collaborate with GameStop to introduce its customer base to the digital asset ecosystem.”

On the day the FTX Group filed for protection from creditors, GameStop tweeted that it was winding down the partnership. Representatives for GameStop didn’t respond to requests for comment. 


Regulators are looking into FTX’s relationships with investment advisers. California’s financial regulator, which is conducting its own FTX investigation, has surveyed advisers about their involvement with the crypto exchange and its affiliates.

The Department of Financial Protection & Innovation asked advisers whether anyone at their firms sold investments linked to FTX, and whether their clients had exposure to FTX or related entities, according to a copy of the regulator’s questionnaire seen by Bloomberg News.

The DFPI survey will be open until early 2023 and its results are confidential, said Elizabeth Smith, a spokesperson for the agency.

While no public data is available, FTX US appears to have made some headway in attracting attention from retirement savers in the months before its bankruptcy. 

Posting on an online forum in mid-July, George Blower, the general counsel for My Solo 401k Financial, responded to an inquiry related to moving retirement savings onto the FTX US platform. 

“We certainly have helped a significant number of clients open accounts for both solo 401k plans as well as IRA LLC accounts at FTX.US,” he wrote in the post, which was deleted after Bloomberg News asked about it. He also tagged Clancy, the FTX US employee, in his message. Blower confirmed the exchange, which appeared on a web forum affiliated with his firm. 

Blower said My Solo 401k Financial doesn’t provide investment advice or oversee any client assets, and the firm never had a business relationship with FTX US. In response to customer questions about how to transfer retirement funds to the exchange, “we provided clients with educational feedback on the mechanical steps,” Blower said in an emailed statement.


Bankman-Fried’s ambitions went beyond just wooing small savers for FTX. He struck deals with distressed firms like Voyager Digital and BlockFi Inc., which would have increased his empire’s footprint in the retail crypto space had it not toppled first. 

FTX also held discussions about buying stock trading app Webull as recently as this summer, according to a person familiar with the matter. The talks advanced as far as price negotiations, the person said, though the companies never reached an agreement. Earlier in the year, Bankman-Fried had purchased a 7.6% stake in Robinhood Markets Inc. The stake was being seized by the US government, lawyers said in court Wednesday.

FTX designed a marketplace where risk-tolerant speculators could win — or lose — big. The global platform,, offered ways for traders to make highly levered bets, including a period where they could juice up their buying power to $101 for every dollar in their accounts. It also offered tokens with built-in leverage, like one called ETHBULL which used futures to amplify potential returns on bullish bets on the cryptocurrency Ether.   

Easy leverage can be a potent incentive for day traders looking for a big payday without putting in much capital, but it also exposes them to massive risks. 

Another way to reach individual investors was through sports marketing, an avenue crypto companies pumped billions of dollars into in recent years. FTX quickly became a heavyweight in the world of sports, spending close to $100 million on sponsorships in 2021 alone, according to consulting firm GlobalData. The company boasted ties to everything from cricket to a Japanese baseball star and Formula One drivers. 

It also linked up with some of the most recognizable stars, including basketball player Steph Curry and quarterback Tom Brady. The two athletes haven’t publicly commented on their relationship with FTX after its implosion. 

Samuel Taylor, a 24-year-old accountant living in Arizona and an avid sports fan, said he came across FTX “literally everywhere,” and was attracted by its celebrity endorsements. He became an FTX US client in July. 

Taylor and his wife had around $12,500 — the bulk of their savings — on FTX US when the company went bankrupt along with the rest of Sam Bankman-Fried’s empire. While he managed to withdraw about $1,000 worth of Bitcoin as FTX teetered, he’s not gotten back the cash he’d parked on the exchange. 

Taylor said he thought cash deposits were insured by the Federal Deposit Insurance Corp. The FDIC issued a cease-and-desist order against FTX US in August, accusing it of falsely claiming or insinuating that deposits were protected by the agency.

“First I was devastated,” Taylor said. “Second I was just so surprised.”

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