Original author: Mitchell Martin, Forbes staff
Original compilation: Luffy, Foresight News
After five years at the New York Stock Exchange, what’s next for you? For Tom Farley, the answer was to dive headfirst into cryptocurrency.
Last month, cryptocurrency news site CoinDesk revealed that it had been acquired by cryptocurrency exchange Bullish, where Tom Farley currently serves as CEO. A day later, Farley confirmed on CNBC that his emerging exchange was also a potential buyer of FTX assets. Asked what would happen if Bullish acquired FTX as it emerged from bankruptcy, Farley said: Theres only so much I can say. But look, were teetering on the edge with FTX.
Tom Farley, CEO of cryptocurrency exchange Bullish
Farley, who declined an interview request from Forbes, apparently prefers stealth mode when it comes to corporate disclosures. In 2022, Farley attempted to acquire Bullish through Far Peak Acquisition, a $600 million special purpose acquisition company (SPAC), but ultimately failed. Farley later became CEO of Bullish in May 2023 without any public announcement. Bullish did not respond to a request for information about how Farley was hired and the terms of his hire, but a person familiar with the matter confirmed that his hiring was not public. He was confirmed as CEO in a Bullish press release on May 2, and his Bullish resume on his LinkedIn profile dates from that month.
The failed deal with the Far Peak Acquisition SPAC would have provided Bullish with about $840 million in new capital and made Farley its new CEO. SPAC shareholders and related investors will receive about 9% of the enlarged companys equity, but less than 3% of the voting rights, so Farley eventually became CEO, but Far Peak failed.
Two SPAC executives have also joined Bullish: David Bonanno (former Far Peak CFO and current Bullish chief strategy officer) and Sara Stratoberdha (former Far Peak vice president and head of business development).
Kristi Marvin, founder of SpacInsider.com, said that while the details of Farley joining the C-suite are a mystery, the failure of his SPAC is not.
Despite having a well-regarded backer like Farley, Marvin believes SEC Chairman Gary Gensler agreed to the deal. Gensler has multiple areas of focus, she said, one of which is the cryptocurrency market, another SPAC.
After taking the helm of Bullish without the help of a SPAC, Farley turned to touting the success of his fledgling exchange. Bullish profiled Farley in the Wall Street Journal in September.
“Bullish’s goal is to strengthen the integrity of the cryptocurrency market, driven by a strong commitment to upholding regulatory and compliance standards.” “The digital asset exchange has achieved important milestones and its governance model for institutional cryptocurrency trading has become more mature.
Bullish claims to have surpassed $300 billion in trading volume since it began operations in November 2021 and, according to Coin Metrics, “consistently ranks in the top three globally for Bitcoin and Ethereum spot trading volume.” Coin Metrics’ Jamie Lovegrove added said that volume data is reported by the exchanges own software. In fact, Bullishs normalized volume (which strips out suspected fake wash trades common among cryptocurrency exchanges) over the past 24 hours, according to CoinGecko ) is only about $40 million, while Bullish himself reported $1.2 billion. Over the past three months, Bullish has reported average daily trading volume of more than $700 million, but data from CoinGecko shows that its trading volume has rarely exceeded $40 million.
Similar to Bankman-Frieds FTX, Bullish insists it is regulated and compliant. Bullish does not operate in the United States and is regulated by the Gibraltar Financial Services Commission. FTX is regulated by the Bahamas Securities Commission.
In a paid special report by The Wall Street Journal, Bullish said that unlike other digital asset exchanges, it was audited by Deloitte, one of the Big Four accounting firms. But the Trust Transparency section on the exchange’s website does not link to the promised audited financial statements.
Bullish’s history is brief. It was founded in 2021 as a subsidiary of Block.one, a blockchain software company backed by a group of billionaire investors including PayPal co-founder Peter Thiel, hedge fund manager Alan Howard and Louis Bacon, as well as Hong Kong tycoon Richard Li.
Before starting operations, Bullish reached an agreement with Farleys Far Peak and others in July 2021 to invest approximately $840 million to acquire a 9% stake in the company, valuing its equity at $9 billion. This strategy would make it easier for Bullish to go public than the traditional IPO route, which is more expensive and requires greater scrutiny from the U.S. Securities and Exchange Commission.
Unlike CoinDesk and Binance, Bullishs focus is limited to providing trading services to approximately two dozen major cryptocurrencies to institutional investors, most of which only have USDC stablecoin trading pairs, according to the website. The exchange offers spot and margin trading, and as of December 7 it offers perpetual contracts on Bitcoin and Ethereum. Perpetual contracts allow investors to take a position on future prices without having to set an expiration date like traditional commodity contracts. Farley no doubt hopes to benefit from SEC approval of a Bitcoin spot ETF, which could open the floodgates to institutional investment in the digital asset.
Terms of Bullishs purchase of CoinDesk from Digital Currency Group have not been announced. The Wall Street Journal reported in July that CoinDesks early sale to an investor group led by Tally Capitalvans Matthew Roszak and Capital 6s Peter Vessenes valued it at $125 million, and that CoinDesk generated $50 million in revenue in 2022.
In announcing the new deal, Farley, 48, said, Bullish will immediately inject capital into several of CoinDesks most exciting growth initiatives, which will drive the launch of new services, events and products. Specific details were not disclosed. But the company said current CoinDesk management will remain in place.
One of the bargaining chips Farley brings to Bullish is blue-chip credentials. The son of a prominent U.S. appeals court judge, Bullish attended the prestigious Gonzaga Boys High School in Washington, D.C., where he was a star baseball player and later played for Georgetown University. In 1997, he earned a degree in political science. Farley, a tall man with boyish good looks, spent time in investment banking, private equity and risk management before joining Intercontinental Exchange as president of U.S. ICE Futures. In May 2012, he became ICEs senior vice president for all financial products.
In November 2013, ICE acquired NYSE Euronext for $11 billion, and Farley was appointed chief operating officer of the New York Stock Exchange, while Duncan Niederauer became CEO. Niederauer retired six months later and Farley succeeded him as president. Farley excelled during his tenure as president of the New York Stock Exchange, building relationships with CEOs, institutional investors and Wall Street titans and frequently attending events such as the World Economic Forum in Davos.
One thing that caught Farley’s attention during his time at the New York Stock Exchange involved cryptocurrencies. Under his leadership, the exchange created the Bitcoin Index and made a private equity investment in a Bitcoin wallet then called Coinbase. NYSE was one of more than 10 investors in that $75 million investment round, and ICE cashed in more than $1.2 billion of its stake in 2021.
In the spring of 2018, Farley was swept up in the SPAC craze and decided to strike out on his own. He believes his SPAC will make a difference: If investors choose to cash out after identifying a target, as they sometimes do, his company will have buyers lined up to buy shares. Farley reached out to his contact list for help at the time, telling Axios: “So I called Dan Loeb, who I’ve known for many years, and asked him to provide $400 million of support and expertise as a partner. He responded: Okay, we hit it off right away.
The new Far Point Acquisition SPAC plans to raise $400 million to acquire a fintech company, with the addition of Loebs Third Point Ventures. Its preliminary prospectus noted that Farleys background is key to the success of the transaction, We believe Mr. Farleys extensive relationships as a leader of the company and his deep experience in the financial technology space and financial markets will enable us to identify and complete attractive transactions. Business merger.
The road was bumpy due to the Covid-19 pandemic, but the SPAC was ultimately successful. In August 2020, Far Point invested in Swiss company Global Blue, which provides services to retailers dealing with foreign tourists. The SPAC and co-investors offered about $1 billion to acquire about 58% of Global Blue, with Farley ultimately serving as chairman and Global Blue CEO Jacques Stern retaining his position. After a series of losses that coincided with the pandemic, the company has been profitable in three of the last four quarters, with sales of $123.2 million in the three months through September, according to YCharts data. Compared with US$141.5 million in the third quarter of 2019, this figure was only US$14.5 million due to the suppression of business in the third quarter of 2020 due to the epidemic.
That gave Farley hands-on experience leading SPAC deals to fruition, but he still hadnt run a company. A year after the deal, hes back with a new SPAC (named Far Peak Acquisition) and a new target, Bullish.
While the FTX brand name is of questionable value to Bullish or anyone else, the once-famous cryptocurrency exchange has a valuable database of approximately 9 million customers. Its other holdings include a large number of cryptocurrencies, which have rallied significantly as the cryptocurrency market has grown. According to a recent Forbes analysis, FTX’s digital assets, including Solana and Bitcoin, and other holdings could repay much of the $15 billion it owes retail customers.
One asset that has not previously shown much viability since FTX went bankrupt is its own FTT token, which included 260 million FTTs according to data from Arkham Intelligence and Nansen. In September 2021, FTT hit an all-time record of over $84 with a market capitalization of over $9.3 billion, but days before the exchange crash, FTT fell to around $25 before closing below $1 in mid-2022 Still close to that level. However, since reports emerged in August that Bullish and other firms were eyeing FTXs assets, FTT prices have jumped to $5, adding approximately $1 billion to the value of the declining exchange.
Farleys idea that he might revive FTX was endorsed by Gary Gensler. CNBC quoted the SEC chairman as saying on November 8, If Tom or anyone else wanted to enter this field, I would say, Do it within the bounds of the law. Build investor trust in what you are doing, Make sure you make appropriate disclosures and make sure you are not trading with your clients or using their crypto assets for your own purposes.”
