SBF’s former employer, Jane Street, profits ahead of Wall Street, with average employee compensation reaching $2.68 million

Well-known market maker Jane Street had standout performance in financial markets last year, distributing up to $9.38 billion in employee compensation, with an average of $2.68 million per employee. Backed by substantial partner equity, the firm not only profited from trading in traditional assets, but also more actively participated in early investments in AI startups such as Anthropic. Notably, former crypto exchange FTX founder Sam Bankman-Fried (SBF) also rose to prominence there early on. He learned quantitative trading techniques at the institution and was deeply influenced by its risk-assessment culture based on expected value.

Jane Street earnings surpassed Wall Street investment banks, with average employee compensation of $2.68 million

Bloomberg reported that Jane Street Group generated $39.6 billion in trading revenue last year, surpassing Wall Street’s large investment banks JPMorgan, Goldman Sachs, and peer Citadel Securities. The company set aside $9.38 billion for employee compensation, with each employee receiving an average of $2.68 million. This compensation structure reflects its operating strategy that heavily relies on building low-latency trading (Low-Latency Trading) models with teams of mathematicians. Its partner equity (i.e., the funds that support the company’s trading operations without needing to use external capital) now stands at $45 billion, providing solid capital for future expansion.

Flexible capital structure and AI startup investments

With ample internal funds, Jane Street has a high degree of flexibility in capital allocation. In addition to covering asset trading such as index funds (Exchange-Traded Fund, ETF), it also invests in early-stage technology companies, including AI startup Anthropic and CoreWeave. Its non-bank market maker status means it is not constrained by traditional bank capital requirements, allowing it to incorporate long-term equity investments into its strategy and expand its market influence in emerging technologies.

SBF’s Wall Street beginnings and quantitative trading

The market maker is known for recruiting mathematicians and puzzle enthusiasts to develop its technology. FTX founder SBF worked at Jane Street as a trader between 2013 and 2017, handling international ETF pricing and arbitrage (Arbitrage). During that time, he accumulated hands-on experience in managing vast, institutional-level capital and coordinating cross-market liquidity (Liquidity) and also met colleagues who would later become core members. This resume laid a deep technical and strategic foundation for profiting from liquidity differences.

In interviews, SBF previously said that Jane Street emphasizes a decision-making culture built on probability and expected value, which profoundly influenced his later business layout. However, traditional market makers have strict risk limits (Risk Limits) and hedging mechanisms (Hedging). After SBF left, in an environment lacking external regulation, he relied too heavily on leverage; this extreme application coupled with shortcomings in corporate governance ultimately became a key factor leading to his financial collapse.

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