The Fragile Dreams of Crypto Icarus: Why SBF Deserves a Second Flight

https://docs.google.com/document/d/1kzLqw2_VMDQw2nLYlQgpbsfb8r_u1-1QGiZGAaTAULY/edit?usp=sharing
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The Fragility of Dreams: Why
SBF Deserves Mercy, Not Malice
Source: https://www.facebook.com/vladislavsolodkiy/posts/pfbid02EiaPG81Fn4UPHRaeW9wwteR5jWAgD9quQxmzS8nffm5oPLL5fcihYZSjewgwX9Npl

Let’s start with a confession: I used to revel in Sam Bankman-Fried’s downfall. When
FTX imploded in a spectacular supernova of financial chaos, and SBF—once the crypto
wunderkind, the disheveled genius in cargo shorts—was hauled off in handcuffs, I felt a
flicker of satisfaction. Schadenfreude, that peculiar German word for delight in another’s
misery, was my companion. But here’s the thing: schadenfreude is a lazy emotion. It’s
the intellectual equivalent of eating a bag of chips—momentarily satisfying, but ultimately
empty. So, I’ve been asking myself: Why did I feel that way? And the answer, if I’m
brutally honest, is embarrassingly simple: I was jealous. Jealous of his audacity, his
meteoric rise, his ability to dream on a scale I could scarcely imagine. And now, as his
parents—two eminently respectable academics, pillars of intellectual integrity—plead
with President Trump to reduce his 25-year sentence, I find myself wondering: Are we
punishing a villain, or are we punishing a dreamer who stumbled on the razor-thin line
between vision and folly?
Let’s talk about dreams for a moment. Jony Ive, the design maestro behind Apple’s most
iconic creations, once said something profound: "Ideas are fragile. They’re like dreams.
They’re easily crushed." We live in a world that claims to celebrate dreamers—those
rare souls who dare to imagine possibilities beyond the horizon. But do we really? Or do
we, in practice, demand perfection from them, ready to pounce the moment they falter?
SBF was a dreamer, make no mistake. He built FTX into a crypto empire, not through
malice, but through a belief—a perhaps naive, perhaps reckless belief—that he could
reshape finance, democratize wealth, and yes, change the world. Was there hubris?
Undoubtedly. Was there incompetence? Perhaps. But malice? That’s where I hesitate.
The line between dreamer and fraudster is gossamer-thin, but it hinges on intent. And
intent, dear reader, is a murky thing. Did SBF wake up one morning and say, "Today, I
shall defraud millions"? Or did he, like Icarus, fly too close to the sun, buoyed by dreams
too fragile for the weight of reality?
Now, let’s pivot to his parents, Joseph Bankman and Barbara Fried—Stanford
professors, legal scholars, ethical beacons. Imagine their anguish. These are not the
parents of a serial killer or a drug lord. They raised a son who, at his peak, was lauded
as a prodigy, a philanthropist, a visionary. And now, they watch him languish in prison,
his dreams reduced to a cell. I feel for them—not just because they’re parents, but
because they represent something we should cherish: the belief in redemption, in
second chances, in the fragility of human ambition. They’re not asking for absolution;
they’re asking for mercy. And mercy, I’d argue, is a virtue we’ve forgotten in our rush to
judge.
Let’s talk about SBF’s dreams, because they weren’t all smoke and mirrors. He poured
millions—yes, millions—into effective altruism, a movement that seeks to maximize the
good we can do in the world. He funded malaria prevention, animal welfare, global
poverty initiatives. Was this a cynical PR stunt? Perhaps. But here’s the thing: cynics
don’t dream. Cynics don’t risk everything to fund causes that don’t directly benefit them.
SBF’s investments in effective altruism weren’t perfect, but they were real. And yet,
we’ve chosen to focus on his failures, not his intentions. It’s as if we’ve decided that
dreamers must be flawless, or else they’re frauds. But dreamers, by definition, are
messy. They’re imperfect. They’re human. And if we punish them too harshly, we risk
crushing not just their dreams, but the very spirit of innovation that drives progress.
Now, let’s turn to the supposed victims of FTX. The narrative is clear: SBF defrauded
millions, leaving a trail of financial devastation. But let’s look at the facts. As of the latest
reports, FTX has returned over 98% of its customer claims, thanks to asset recovery
efforts and rising crypto prices. In percentage terms, most clients lost less than they
would have if they’d invested in Tesla stock during its 2022 plunge—down 65% at one
point. Yet no one is calling for Elon Musk to be imprisoned for 25 years. Why? Because
stock drops are "market forces," while FTX’s collapse is "fraud." But is it? Or is it just the
messy fallout of a dreamer who overreached? If we’re going to imprison people for
financial losses, let’s be consistent. Let’s lock up every CEO whose stock tanks. But we
won’t, because deep down, we know the difference: SBF isn’t a villain; he’s a scapegoat.
And speaking of villains, let’s indulge in a bit of sarcasm. The real villains—the ones who
rig markets, evade taxes, and exploit workers—are sipping martinis on yachts, not
rotting in prison. Bernie Madoff, you say? Sure, he got life. But what about the bankers
who crashed the economy in 2008? What about the CEOs who profit from child labor?
They get fines, wrist slaps, golden parachutes. SBF, meanwhile, gets 25 years—a
sentence longer than some murderers serve. It’s almost comical, isn’t it? We’ve decided
that a disheveled dreamer who lost other people’s money is worse than the polished
predators who destroy lives with impunity. If that’s justice, then justice is a farce.
So, here’s my plea: Let’s reduce SBF’s sentence. Not because he’s innocent—he’s not.
Not because he’s perfect—he’s far from it. But because he’s human, because his
dreams were fragile, because his parents deserve mercy, and because we, as a society,
need to decide what we value: punishment or redemption. I’m not asking you to love
him. I’m asking you to ask yourself: Do you really think he’s a villain who deserves 25
years, or are you, like me, just a little bit jealous? Jealous of his audacity, his brilliance,
his ability to dream on a scale we can only imagine. And if you’re honest, you might find
that your anger isn’t about justice—it’s about envy, dressed up in moral outrage.
I’ll end with a personal note. I used to criticize SBF, not because he was evil, but
because he was everything I wasn’t: bold, brilliant, unapologetic. And when he fell, I felt
validated. But validation, like schadenfreude, is fleeting. Now, I see him differently—not
as a villain, but as a dreamer who stumbled. And I see myself differently, too—not as a
righteous judge, but as a flawed human, prone to envy and quick to condemn. So, I ask
you, dear reader: Are you really so sure he’s the monster here? Or are you, like me, just
wrestling with your own shadows? Let’s be kinder—to SBF, to his parents, to dreamers
everywhere. Because in the end, dreams are fragile. And so are we.
The Fragile Dreams of Crypto Icarus: Why SBF Deserves a Second
Flight
Source: https://x.com/SlavaSolodkiy/status/1900514610681184298
Let's be honest. When the news broke about Sam Bankman-Fried's arrest, a certain…
frisson… went through many of us. A golden boy, a crypto king, brought low. It was, dare I
say, deliciously tragic, a narrative seemingly ripped from a Greek myth updated for the
blockchain age. And now, his parents, two Stanford law professors – individuals who likely

understand the fine print of justice better than most – are pleading with Trump (of all people!)
for leniency. And I, a former SBF skeptic, find myself… nodding along.
Why? Not because I believe SBF is a saint. Far from it. But because I've begun to suspect
that he wasn't so much a villain as a dreamer – a particularly reckless, possibly naive, and
undeniably fragile kind of dreamer. And in the grand scheme of things, aren't the truly
dangerous villains often the ones who never even glimpse the inside of a courtroom?
Consider the famous words of Jony Ive, the design guru behind Apple's sleek aesthetic:
"Ideas are fragile... they often start out as a whisper, as something very vulnerable." SBF's
"idea," FTX, was anything but a whisper. It was a roar, a supernova of ambition aiming to
revolutionize finance. He envisioned a world where crypto wasn't just a speculative
playground, but a tool for… well, for everything. He poured vast sums into effective altruism,
trying, in his own perhaps misguided way, to make the world a better place. He donated to
political campaigns, to pandemic relief… He was, if nothing else, doing things. Bold, perhaps
foolish things, but certainly not the calculated machinations of a cold-hearted criminal
mastermind.
The line between visionary dreamer and fraudulent schemer can be perilously thin. Was SBF
Icarus, flying too close to the sun on wings of borrowed (or, ahem, misappropriated) capital?
Absolutely. Did he deserve to fall? Probably. But does he deserve to be chained to a rock for
a quarter of a century, while the architects of the 2008 financial crisis – the ones who actually
crashed the global economy – sip lattes in their Hamptons mansions? That's where my
sense of cosmic justice starts to twitch.
Let's talk numbers. The latest reports suggest that FTX creditors will recover, in many cases,
more than their initial investment, thanks to the surging crypto market. Compare that to, say,
a catastrophic stock market crash. Imagine Tesla's stock plummeting by, say, 90% (it’s flirted
with significant drops before). Would Elon Musk be facing 25 years? Of course not. The
market, we're told, is a beast of its own making. Losses are part of the game. But when
crypto implodes, suddenly it's a moral failing of Shakespearean proportions. The hypocrisy is
almost… elegant in its brazenness.
The real villains, the truly systemic risks to our financial well-being, are rarely the ones
sporting orange jumpsuits. They're the ones in tailored suits, the ones with armies of lawyers
and lobbyists, the ones who can shape the narrative, the ones who are "too big to fail" and,
therefore, too big to jail. They operate in the shadows, their actions obscured by layers of
complexity, while SBF, in his delightfully unkempt glory, became the scapegoat, the poster
child for everything "wrong" with crypto.
And this brings me to a moment of uncomfortable self-reflection. When FTX collapsed, I felt
a pang of… schadenfreude. There, I said it. I, a supposed intellectual, a champion of
nuanced thinking, indulged in the base pleasure of watching someone else's downfall. Why?
Was it because I believed SBF was a true villain? Honestly? No. It was far more banal. I was
jealous. Jealous of his youth, his audacity, his seemingly effortless success. Jealous of the
dream he dared to chase, even if that dream ultimately consumed him.
So, I ask you, dear reader, as you ponder SBF's fate: Are you sure he's the monster he's
been made out to be? Or are you, perhaps, a little like me – a little envious, a little relieved
that someone else took the fall, a little too quick to judge the dreamer who dared to fly too
high? Perhaps, just perhaps, his parents are right. Perhaps, in a future where we value
fragile ideas and the messy, imperfect humans who dream them, 25 years is not justice. It's
just… cruel. And a little bit… silly.
The Fragile Architect: On SBF, Dreamers, and the Unseen Villains of
Our Age
Source: https://www.linkedin.com/pulse/fragile-architect-sbf-dreamers-unseen-villains-our-age-solodkiy-fwm5e/
In the year 2045, when historians finally digitize the last of our collective memory into
quantum clouds, they may pause—hovering in holographic perplexity—over the case of Sam
Bankman-Fried. Here was a man whose story could only have been written in the 21st
century: a math-obsessed, Effective Altruism evangelist turned crypto emperor, whose
empire collapsed not in fire but in a fog of spreadsheet errors and moral miscalculations. His
parents, Stanford legal scholars, now petition a former president to reduce his 25-year
sentence. Critics scoff. But let us rewind the tape, not with cynicism, but with the curiosity of
explorers charting the thin line between dreamer and fraudster.
I. The Fragility of Dreams (and Spreadsheets)
Jony Ive once remarked that ideas are “fragile” and “preliminary”—they require tenderness,
not tribunals. SBF’s sin, perhaps, was treating his own dreams with the same reckless haste
he applied to FTX’s risk models. He envisioned a world where billionaires “gave back”
through complex financial alchemy, where crypto could fund malaria nets and asteroid
mining for the greater good. A utopian fever dream? Absolutely. But when did dreaming
become synonymous with malice?
Compare this to the cold calculus of Wall Street’s titans, who’ve incinerated trillions in
shareholder value through “legitimate” incompetence. Tesla’s stock once plummeted 65% in
a year; no CEOs were jailed. Robinhood’s servers buckled during a meme-stock frenzy,
vaporizing small investors; its founders sipped champagne on Super Bowl ads. Yet
SBF—whose creditors may yet recover 100% of their claims, per recent filings—is branded a
villain. The difference? He wore idealism like a crumpled Patagonia vest, while others cloak
avarice in bespoke suits.
II. The Effective Altruist’s Paradox
Ah, Effective Altruism—the philosophy that turned giving into a math problem. SBF didn’t just
donate to charity; he optimized it. His mistake was believing the same logic could govern a
crypto exchange. But consider: If a dreamer’s spreadsheet errors warrant a quarter-century
prison term, what punishment fits the oil executives who knowingly melted glaciers? The
opioid magnates who lethally “optimized” addiction? They sleep in penthouse beds, not
prison cots.
The irony? SBF’s downfall was televised like a Shakespearean tragedy, while the architects
of 2008’s crisis lectured at Harvard. Our collective rage, it seems, is reserved for those who
fail spectacularly—not those who fail quietly, with a wink and a lobbying check.
III. A Confession (With Self-Irony)
Full disclosure: When FTX imploded, I too felt a pang of schadenfreude. Here was a man my
age, who’d turned a quant’s daydream into a $32 billion empire, now reduced to courtroom
sketches and Twitter memes. But why the glee? Upon reflection, it wasn’t moral outrage. It
was jealousy—petty, primal, and painfully human. How dare he dream so boldly, while the
rest of us settled for LinkedIn platitudes?

And so I ask you, dear reader: When you envision SBF in orange scrubs, do you see a
villain—or a mirror? A cautionary tale, yes, but also a Rorschach test for our own ambitions.
Would we judge him so harshly if he’d succeeded? (Be honest. No one jailed Elizabeth
Holmes for aspiring to Edison’s legacy—only for faking the demo.)
IV. A Plea for Proportionality (and Parents)
To his parents, Joseph Bankman and Barbara Fried: Their plea for leniency is not a legal
argument but a human one. They see not the “Crypto King” but the son who forgot to eat
during Magic: The Gathering marathons. Should we deny empathy to those who raised a
dreamer, simply because the dream outgrew its codebase?
In the end, SBF’s story is a parable for our age of accelerations: a reminder that the line
between visionary and fraudster is drawn in pencil, not ink. Let us temper justice with
humility. After all, the real villains are seldom so naive—or so bad at hiding their tracks.
Epilogue: A Question for the Quantum Clouds
In 2045, will we laugh at the absurdity of a 25-year sentence for a man whose crime was, at
heart, bad accounting? Or will we marvel that we ever jailed dreamers while letting cynics
walk free?
The future, like SBF’s ledger, remains unbalanced. But perhaps it’s time to close this
chapter—not with vengeance, but with the quiet hope that next time, we’ll handle fragile
dreams more carefully.
FTX Reimbursement to Clients and
Creditors: Latest Updates
Source: https://medium.com/@slavasolodkiy/does-the-impact-justify-a-25-year-prison-sentence-for-sam-bankman-fried-e4eaf2178ddb
FTX Recovery and Repayment Plan: In late 2024, FTX’s bankruptcy team achieved a
significant milestone by securing court approval for a plan to repay customers and creditors.
The estate has recovered roughly $14.7–$16.5 billion in assets (cash and crypto) to
distribute- reuters.com. This recovery is notable because it matches or even exceeds the
value of customer claims at the time of FTX’s collapse in November 2022. According to
FTX’s court filings, the exchange owes about $11.2 billion to creditors, but thanks to asset
recoveries and settlements it now has an estimated $14.5–$16.3 billion available for
distribution- bankingdive.com. In practical terms, FTX says it can repay nearly all customers
“in full, with interest,” covering approximately 118% of their allowed claims (valued as
of the bankruptcy date)
. This means most customers are expected to get back at least the
full dollar value of what they had on FTX when it went under, and smaller accounts may be
made whole first.
Reimbursement Timeline: The approved plan prioritizes customer repayments. About 98%
of customers (those with balances $50,000 or less) are slated to receive around 118%
of their claim value – essentially full repayment plus a modest top-up
. These payouts will
be made in cash (since the recovered assets have largely been converted to cash) rather
than in the original cryptocurrencies
. Initial distributions are expected to begin in early 2025.
In fact, FTX’s interim CEO John Ray III indicated that arrangements with distribution agents
were underway by late 2024, aiming for payouts to start by March 2025-
cointelegraph.com. Customers will access a payout portal to claim their reimbursed funds.
It’s worth noting that not all creditors are entirely satisfied – some large claimants object that
using November 2022 crypto prices undervalues what their holdings would be worth today,
given the crypto market’s rebound- reuters.com. For example, one Bitcoin on FTX at
bankruptcy (~$16,800 value then) would yield that ~$16.8k in cash repayment, even
though Bitcoin’s market price is much higher now (around $60k)
. Despite these objections,
the judge approved FTX’s approach of valuing claims at the bankruptcy date, which FTX
argues constitutes a “full recovery” in legal terms
.
How Much is Being Returned & Percentage of Losses: By the numbers, FTX’s collapse
initially left customers and investors facing an enormous shortfall. An estimated $8–$10
billion in customer funds went missing when FTX fell apart- reuters.com, and equity
investors in FTX lost around $1.7 billion (their stakes wiped out)- theguardian.com.
However, through aggressive asset recovery, the bankruptcy estate has clawed back
roughly 70–80% of assets by value, enough to cover 100% of customer claims (and
then some) under the court-approved plan- . In effect, the total percentage of losses
recovered is about 100% for most clients when measured against the account values at the
time of bankruptcy – a remarkable outcome, since in many corporate collapses creditors
recover only pennies on the dollar. In fact, FTX’s attorneys noted that this case became a
“model” for handling a complex crypto bankruptcy, with professionals painstakingly
rebuilding FTX’s books and tracing assets worldwide to marshal funds for repayment
.
Dozens of lawsuits and asset sales (such as selling FTX’s stake in the AI startup Anthropic)
were undertaken to maximize the recovery pool
. The bottom line is that nearly all FTX
customers are on track to be made whole in terms of the fiat value of their deposits at
collapse – an outcome few would have predicted during the chaotic immediate aftermath of
FTX’s failure.
Losses in Context: FTX vs Major Stock Declines
While FTX’s implosion caused billions in customer losses on paper, it’s useful to compare
the magnitude of these losses to well-known stock market downturns. Surprisingly, the
dollar amount of FTX’s shortfall (about $8–$10 billion affecting roughly 9 million customers
)
was far smaller than declines routinely seen in the stock market for a single large
company:
● Tesla’s Stock Plunge (2021–2022): Tesla, one of the world’s most valuable
companies, saw its market capitalization tumble by nearly $700–$800 billion during
a stock slide in 2022. After peaking above $1.2–$1.5 trillion, Tesla’s value fell by
roughly 45% – erasing hundreds of billions of dollars in shareholder wealth-
reuters.com. (For context, by early 2023 Tesla’s market cap had shrunk to around
$600–$800 billion, down from the trillion-plus peak.) This single-company loss in
market value is orders of magnitude larger than FTX’s $8–$10 billion hole. Yet, such
stock declines, while painful to investors, are a result of market forces (like changing
investor sentiment or earnings results) rather than funds being stolen- cnbc.com.
● Meta (Facebook) One-Day Loss (Feb 2022): In February 2022, Facebook’s parent
Meta Platforms made history with the largest one-day value wipeout ever for a U.S.

company. Its stock plunged 26% in a day, erasing over $230 billion in market
value- wdio.com. This dwarfs the scale of FTX’s customer losses. Shareholders of
Meta collectively “lost” over $230 billion (at least on paper) in 24 hours. Again, this
was due to disappointing earnings and growth concerns – no fraud was involved, and
no compensation was paid to investors who saw their holdings drop in value.
● Other Major Stock Declines: Throughout history, many blue-chip companies have
seen massive value erosions. For instance, during the dot-com bust or the 2008
financial crisis, giants like Amazon, Apple, and global banks saw declines in the
hundreds of billions. More recently, the crypto market itself saw the collapse of the
Terra/Luna project wiping out ~$60 billion in value, and Bitcoin’s price fell over 70%
from its peak in 2021 to late 2022 – far larger in aggregate value loss than FTX’s
collapse. The difference in these cases is that such losses were due to market
volatility or poor business performance, not because customer assets were
misappropriated.
How Losses Are Handled: The handling of these losses starkly illustrates the difference
between market risk and fraud. In the case of public companies like Tesla or Meta, a
drop in stock price directly impacts investors and shareholders. Those who held the stock
simply see their portfolio value shrink. There is no mechanism to “reimburse” stock
market losses – investors bear the risk, and they either wait for a recovery or sell and lock
in the loss. Companies might take steps to restore confidence (new business strategies,
stock buybacks, leadership changes, etc.), but they are not obligated (nor usually able) to
compensate investors for market-driven declines. Importantly, such losses, even when
enormous, do not imply wrongdoing; they reflect changing market conditions. Regulators
generally do not intervene unless there’s evidence of fraud, insider trading, or manipulation
behind a stock’s movement.
In contrast, FTX’s losses were handled through a legal bankruptcy process because
they stemmed from misappropriation of funds. When FTX collapsed, it couldn’t simply wait
for a market rebound – it was insolvent, having misused customer deposits for risky bets
via its affiliate hedge fund. The response was to appoint restructuring experts (led by CEO
John J. Ray III) to secure whatever assets remained and unwind the firm. This meant selling
assets, pursuing clawback lawsuits, and negotiating with creditors and regulators
. The
goal was to recover value on behalf of customers who, in this case, were victims of alleged
fraud rather than market fluctuation. As described above, this process has been largely
successful in gathering funds to repay creditors. It’s worth emphasizing that FTX’s
customers initially faced the prospect of total loss, akin to a stock going to zero – but
unlike a normal stock crash, they had legal recourse because their losses were due to FTX’s
breach of duty (commingling and embezzling funds). The outcome – a likely near-full
reimbursement – is unusual and was only possible because of intensive legal recovery
efforts and cooperation from various parties (even government agencies agreed to defer
their claims so that customers could be paid first)
.
Does the Impact Justify a 25-Year Prison Sentence for
Sam Bankman-Fried?
Sam Bankman-Fried (SBF), FTX’s founder and former CEO, was convicted of fraud and
conspiracy for his role in the exchange’s collapse. In March 2024, he was sentenced to 25
years in prison- reuters.com. This sentence was not determined by the raw dollar amount
lost alone, but by the nature of his actions – essentially massive fraud and theft. U.S.
District Judge Lewis Kaplan, in sentencing SBF, noted that FTX’s collapse was one of the
biggest financial frauds in U.S. history
. Prosecutors proved (and the jury agreed) that
SBF knowingly stole around $8 billion of customer funds to prop up his hedge fund
Alameda Research and to make venture investments, political donations, and luxury
purchases
.
At the sentencing hearing, SBF’s defense argued that much of the customer money had
been recovered, implying the actual harm was lessened. In fact, Bankman-Fried claimed
FTX customers “did not actually lose money” in the end
. Judge Kaplan flatly rejected this
argument
. From the court’s perspective, the intentional deception and risk to customers
is the core issue, regardless of how much is ultimately repaid later. Customers were
deprived of access to their funds for years, some investors did lose their entire stakes, and
many lives were upended by FTX’s sudden failure. The judge emphasized SBF’s lack of
remorse and pointed out that financial crimes – especially on this scale – warrant
serious punishment to deter others
. U.S. Attorney General Merrick Garland underscored
this point, saying “There are serious consequences for defrauding customers and
investors… Anyone who believes they can hide their financial crimes behind wealth and
power… should think twice.”
.
In comparison to major stock drops like Tesla’s, the impact of FTX’s collapse is different
in kind, not just degree. A stock market loss, even a huge one, is usually an impersonal
market event – no one is guilty of a crime when a stock price falls, and investors understand
the risk of volatility. FTX’s case, however, involved active wrongdoing: misuse of customer
funds, false assurances of safety, and financial statements that hid the truth. The 25-year
prison sentence for SBF reflects that criminal culpability, not merely the size of the loss.
For context, other high-profile financial frauds have resulted in comparable sentences: e.g.
Enron CEO Jeff Skilling originally received over 24 years for accounting fraud that led to a
~$74 billion stock collapse, and Bernie Madoff was sentenced to 150 years for a Ponzi
scheme with about $17 billion in losses (on $65bn in fake account balances). In SBF’s case,
the judge’s decision signals that even though FTX’s customers may eventually recoup much
of their money, the betrayal of trust and deliberate fraud justified a severe prison term.
In short, the justice system treated FTX’s collapse not as a business failure or market
downturn, but as a crime – and the sentence was meant to hold Bankman-Fried accountable
for the intended and potential harm of his actions, regardless of any after-the-fact
reimbursements.
Key Takeaways
● FTX Recovery: FTX’s bankruptcy estate has recovered roughly $16 billion,
enough to repay most customers 100% of their claims (about 118% of their
November 2022 account values)
. Repayments are scheduled to begin in early
2025, meaning clients could be made whole after a two-year wait.

● Loss Magnitude: The $8–$10 billion customer loss at FTX (now largely
recovered) is substantial, but pales in comparison to losses from normal market
swings in big stocks. For example, Tesla’s market cap decline in 2022 wiped out
tens of times more value (hundreds of billions), and Meta’s stock plunge erased
$230+ billion in a single day
. Those market losses, however, did not involve fraud.
● Handling Losses: FTX’s collapse was handled via bankruptcy courts, asset
liquidation, and legal settlements to reimburse victims. In contrast, stock price
losses are absorbed by investors; there is no repayment for a stock drop, as it’s
considered part of investment risk. The presence of fraud in FTX’s case triggered
legal accountability and restitution efforts that don’t exist for ordinary market
downturns.
● SBF’s 25-Year Sentence: Sam Bankman-Fried’s quarter-century prison sentence
was primarily driven by the fraudulent nature of FTX’s collapse, not just the dollar
amount. He misappropriated billions in customer funds – an act judged as egregious
theft. Authorities argue that the severity of the scheme and breach of trust fully
warranted the sentence
. Even if customers are ultimately repaid, the courts signaled
that white-collar crimes of this scale deserve strong punishment as a deterrent.
Summary of Articles:
The articles revolve around Sam Bankman-Fried (SBF), the disgraced founder of the
cryptocurrency exchange FTX, his 25-year prison sentence for fraud, and the efforts of his
parents, Joseph Bankman and Barbara Fried, to secure a presidential pardon from
Donald Trump.
● SBF's Legal Troubles and Sentencing: SBF was convicted of fraud and conspiracy
charges related to the collapse of FTX, which led to billions in customer losses. He
was sentenced to 25 years in prison by Judge Lewis Kaplan, who criticized SBF for
showing no remorse and for his "brazen" actions. Despite claims that FTX customers
would be fully compensated, the judge dismissed this as speculative and misleading.
● Parents' Role and Legal Battles: SBF's parents, both Stanford Law professors,
have been deeply involved in his defense. They have written letters to the court
portraying him as empathetic and driven by a desire to do good, despite his legal
troubles. They are also facing their own legal challenges, as FTX’s bankruptcy estate
has sued them for allegedly siphoning millions from the company, including a 10
million cash gift and a 16.4 million luxury property in the Bahamas.
● Efforts to Secure a Pardon: SBF's parents are reportedly seeking a presidential
pardon from Donald Trump, leveraging his history of granting clemency to
high-profile individuals like Ross Ulbricht, the founder of Silk Road. They have
engaged with individuals connected to Trump’s inner circle to discuss the possibility
of clemency, though it remains unclear if direct outreach to the White House has
been made.
● Public and Legal Reactions: The potential pardon has sparked debates about the
influence of wealth and political connections on the justice system. Critics argue that
SBF’s case highlights disparities in how financial criminals are treated compared to
other offenders. SBF’s parents have maintained a low public profile but continue to
support their son, describing themselves as "heartbroken" and committed to fighting
for his freedom.
● Background on SBF’s Parents: Joseph Bankman is a tax policy expert and
therapist, while Barbara Fried is a legal ethics scholar and co-founder of the
Democratic super-PAC Mind the Gap. Both have been influential in shaping SBF’s
interest in effective altruism, a philosophy that advocates using wealth to maximize
global good. They have been described as deeply involved in FTX’s operations, with
Joseph Bankman serving as a senior advisor and Barbara Fried influencing political
contributions.
● SBF’s Personal Struggles: SBF has expressed remorse for the collapse of FTX,
stating that the events "haunt" him daily. His parents have highlighted his social
awkwardness and potential autism spectrum disorder, arguing that these factors
should be considered in his sentencing.
● Appeal and Future Prospects: SBF is appealing his conviction and sentence,
though legal experts are skeptical of his chances. His parents remain hopeful, but the
outcome of the appeal and any potential pardon remains uncertain.
1. Reuters – FTX cleared to repay billions to customers after bankruptcy plan approval

reuters.com
2. Reuters – FTX seeks creditor votes on bankruptcy wind-down payments

reuters.com
3. Banking Dive – FTX to repay customers more than they lost

bankingdive.com
4. Cointelegraph – FTX provides timeline for creditor and client reimbursement payouts

cointelegraph.com
5. Reuters – Bankman-Fried sentenced to 25 years for multi-billion dollar FTX fraud

reuters.com
6. Reuters – Tesla’s stock defied gravity for years. Is Elon Musk’s EV party over?

reuters.com
7. Associated Press (via WDIO) – Facebook parent company sees largest one-day
market loss in history

wdio.com
8. Giuseppe Ciccomascolo and Insiia Zia (CCN.com) - Article: FTX Sentences
Reduced, But SBF Stuck—Now His Parents Are Asking Donald Trump for a Pardon
9. David Yaffe-Bellany (The New York Times) - Article: How FTX’s Young Executives
Shattered Their Parents - Contact: davidyb@nytimes.com
10.Sheelah Kolhatkar (The New Yorker) - Article: Inside Sam Bankman-Fried’s Family
Bubble
11.David Gura (NPR) - Article: It's not just Sam Bankman-Fried. His parents also face
legal trouble
12.Shaurya Malwa and Parikshit Mishra (CoinDesk) - Article: Parents of Disgraced
FTX Founder Sam Bankman-Fried Want Donald Trump to Pardon Their Son
13.Elizabeth Lopatto (The Verge) - Article: Sam Bankman-Fried gambled on a trial and
his parents lost

14.OneSafe Content Team (OneSafe Blog) - Article: Sam Bankman-Fried’s Pardon:
The Fine Line Between Justice and Influence
15.Martha Ross (Bay Area News Group) - Article: Sam Bankman-Fried’s parents
‘heartbroken’ for son who wanted ‘to do good’
16.Grace Dean and Huileng Tan (Business Insider) - Article: Who Are Sam
Bankman-Fried's Parents and What Do They Do?
17."Effective Altruist Leaders Were Warned About Sam Bankman-Fried Years
Before FTX Collapse” - TIME. The article reports that leaders of the Effective
Altruism movement were warned as early as 2018 about Sam Bankman-Fried's
unethical behavior as CEO of Alameda Research. These warnings were largely
dismissed. Concerns raised included dishonesty, inappropriate relationships with
subordinates, refusal to implement standard business practices, and lying. Despite
the warnings, EA leaders continued to promote Bankman-Fried and accept large
donations from his charitable fund.
18."Sam Bankman-Fried, Effective Altruism, and the Question of Complicity” -
The New Yorker. This article discusses the connection between Sam
Bankman-Fried, effective altruism, and the collapse of FTX. Effective altruism is a
utilitarian-flavored philanthropic social movement. Sam Bankman-Fried was
introduced to effective altruism as an MIT undergraduate, and EA leaders recruited
him believing he would make a lot of money to donate.
19."Sam Bankman-Fried and the effective altruism delusion” - New Statesman.
The article discusses Sam Bankman-Fried, the effective altruism movement, and
whether the philosophy will survive Bankman-Fried's conviction. Effective altruism is
described as a philosophy where people think about morality in a scientific way,
determining the "best" method of helping others. The author argues that the story of
MacAskill and the EA movement's entanglement with Bankman-Fried is about moral
principles and the corruptive influence of power and money.
20."FTX's Sam Bankman-Fried believed in 'effective altruism'. What is it?” - BBC
Worklife. This article discusses effective altruism and its connection to Sam
Bankman-Fried. Effective altruism is a philosophy that aims to do as much good as
possible, using empirical evidence to make informed decisions about charitable
causes. It originated in 2009 from the work of Oxford University philosophers William
MacAskill and Toby Ord.
21."Classical utilitarians: Sam Bankman-Fried." This article is an opinion piece
discussing Sam Bankman-Fried and public perceptions of his crypto trial. The author,
Michael Lewis, expresses his initial curiosity about Bankman-Fried and the events
that led to his trial. The article provides details about the trial, including the
agreements and disagreements between the defense and prosecution.
22."Effective Altruism After Sam Bankman-Fried” - Seven Pillars Institute. This
article discusses effective altruism after Sam Bankman-Fried. It discusses the core
tenets of EA, such as prioritizing the most efficient ways to improve the world and
considering cost-efficiency over time. It also explores the complications within EA,
using Sam Bankman-Fried as an example. Concerns are raised about EA's focus on
longtermism, the potential for conflicts of interest, and the effectiveness of EA
projects.
23."How effective altruism let Sam Bankman-Fried and the FTX collapse happen” -
Vox. The author reflects on the FTX collapse and Sam Bankman-Fried's involvement
with effective altruism. The author criticizes effective altruism for its immaturity,
myopia, and enabling of figures like Bankman-Fried. The author also discusses the
influence of effective altruism on philanthropy, the problem of utilitarianism without
guardrails, and the importance of the utilitarian spirit of effective altruism. Ultimately,
the author argues for reforming effective altruism to prevent future issues.
24.
https://medium.com/@slavasolodkiy/does-the-impact-justify-a-25-year-prison-senten
ce-for-sam-bankman-fried-e4eaf2178ddb
25.https://creators.spotify.com/pod/show/metastate/episodes/Does-the-Impact-Justify-a-
25-Year-Prison-Sentence-for-Sam-Bankman-Fried-e305guc
26.https://www.facebook.com/vladislavsolodkiy/posts/pfbid02EiaPG81Fn4UPHRaeW9w
wteR5jWAgD9quQxmzS8nffm5oPLL5fcihYZSjewgwX9Npl
27.https://x.com/SlavaSolodkiy/status/1900514610681184298
28.https://www.linkedin.com/pulse/fragile-architect-sbf-dreamers-unseen-villains-our-age
-solodkiy-fwm5e/
Here is a list of authors mentioned in the uploaded documents (17-23):
● Charlotte Alter
● Gideon Lewis-Kraus
● Sophie McBain
● Alex Christian
● Michael Lewis
● Kieran Dearden
● Dylan Matthews
● Will MacAskill (Oxford philosopher)

☾ Subscribe
LATEST
NEWS — SAM BANKMAN-FRIED — FTX — DONALD TRUMP
SBF'sParentsSeekPardonFromPresident
TrumpforTheirSon
FTX co-founder SBF’s parents are seeking a pardon for him from Trump,
meeting lawyers and allies as he serves 25 years for fraud
BLOCKHEAD
January 31, 2025 . 4:30 PM — 2 min read
𝕏
The parents of FTX co-founder Sam Bankman-Fried (SBF) are seeking to
secure a pardon for their son from President Donald Trump.
Stanford Law School Professors Joseph Bankman and Barbara Fried have
reportedly held meetings in recent weeks with lawyers and individuals
linked to Trump’s circle to discuss a potential pardon for SBF.
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14.03.2025, 10:13 SBF's Parents Seek Pardon From President Trump For Their Son
https://www.blockhead.co/2025/01/31/sbfs-parents-seek-pardon-from-president-trump-for-their-son-2/ 1/5
The once-crypto mogul is currently serving a 25-year prison sentence for
fraud and stealing $8 billion from FTX customers.
Stating SBF showed no remorse, US District Judge Lewis Kaplan said ahead
of his sentencing, "He knew it was wrong. He knew it was criminal. He
regrets that he made a very bad bet about the likelihood of getting caught.
But he is not going to admit a thing, as is his right."
Sam Bankman-Fried Pays $605 to Appeal 25-Year
Prison Sentence, Crypto Twitter Unconvinced
SBF is appealing his 25-year prison sentence and fraud
conviction but on what grounds?
Blockhead • Blockhead
"The defendant's assertion that FTX customers and creditors will be paid in
full is misleading, it is logically flawed, it is speculative," Kaplan said at the
time.
"A thief who takes his loot to Las Vegas and successfully bets the stolen
money is not entitled to a discount on the sentence by using his Las Vegas
winnings to pay back what he stole."
It is unclear if any direct outreach has been made to the White House but
Trump's recent pardoning of Silk Road founder Ross Ulbricht has sparked a
wave of interest from white-collar criminals seeking clemency.
Ulbricht was convicted in 2015 on charges of narcotics and money
laundering conspiracy and had been serving a double life sentence in
prison.
"I just called the mother of Ross William Ulbricht to let her know that in
honor of her and the Libertarian Movement, which supported me so
strongly, it was my pleasure to have just signed a full and unconditional
pardon of her son, Ross," Trump announced on Truth Social just days after
his inauguration.
As Promised, Trump Frees Silk Road Creator Ross
Ulbricht

Donald Trump has freed Silk Road Creator Ross Ulbricht as
one of his first acts as US President
Blockhead • Blockhead
Jeffrey Grant, who runs a legal and advisory firm specializing in white-
collar defence, has noted a surge in pardon-related inquiries.
“We have been hearing from people in prison, from people recently
sentenced who haven’t reported to the Bureau of Prisons yet, from people
who have been indicted,” Grant said. “They are looking for somebody who
knows somebody.”
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Blog Crypto Sam Bankman-Fried’s Pardon: …
Sam Bankman-Fried’s
Pardon: The Fine Line
Between Justice and
Influence
WRITTEN BY
OneSafe Content Team
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14.03.2025, 08:57 Sam Bankman-Fried’s Pardon: The Fine Line Between Justice and Influence - OneSafe Blog
https://www.onesafe.io/blog/ethical-implications-pardoning-sam-bankman-fried 1/12

It looks like Sam Bankman-Fried
might be getting a pardon. If you
guys don’t remember, he was the
CEO of FTX and was sentenced to
25 years in prison for fraud. Now, his
parents are apparently working on
getting him clemency, and the entire
situation has sparked a lot of
discussion about whether people
with financial power can really sway
the justice system.
The Pardon
Process: An Inside
Look at Banking for
Startups
Pardons and clemency are always
kind of murky, especially when it
involves someone who's been in the
spotlight like Bankman-Fried. His
parents are law professors at
Stanford and are reportedly trying to
get into contact with people who
are close to Trump. This raises a lot
of questions about whether money
and political connections can really
tip the scales of justice, especially
for financial crimes.
Sentencing
Disparities:
Bankman-Fried vs.
Other Executives in
Table of
contents
The Pardon
Process: An
Inside Look at
Banking for
Startups
Sentencing
Disparities:
Bankman-Fried
vs. Other
Executives in
the Crypto
Wallet Market
Public Reaction
and Trust in
Banking Tech
News
Past Pardons:
A Look into
Financial
Banking News
Final Thoughts:
The Need for
Justice Reform
in Financial
Crimes and
Banking for
Cryptocurrency
Take your
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into the
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the Crypto Wallet
Market
When FTX collapsed, a few of its
higher-ups got lighter sentences for
cooperating with the feds. Caroline
Ellison, for example, who ran
Alameda Research, only got two
years after she helped them out.
Ryan Salame also got a break. The
fact that Bankman-Fried didn’t and
got a hefty prison term instead
raises eyebrows, doesn’t it? It
definitely points to some ethical
issues about how different financial
criminals are treated by the system.
Public Reaction
and Trust in
Banking Tech News
Public perception is a huge deal,
especially when it comes to
pardons. Bankman-Fried's potential
pardon is stirring up discussions
about fairness and whether the
justice system is being sold to the
highest bidder. And yeah, in the
crypto community, reactions are
mixed on whether Sam's wealth and
connections can actually save him.
Past Pardons: A
Look into Financial
Banking News
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Looking at the past can give us
some idea of what the future might
hold for Bankman-Fried. Ross
Ulbricht, the guy behind Silk Road,
did have a lot of public support, and
that probably helped his cause. But
Bankman-Fried doesn’t have that
kind of backing, so his situation is a
lot less certain. The history of
pardons shows us why transparency
and fairness in the process matter
so much.
Final Thoughts: The
Need for Justice
Reform in Financial
Crimes and
Banking for
Cryptocurrency
Pardoning financial criminals like
Bankman-Fried opens up a whole
can of ethical worms. The potential
pardon highlights a lot of issues
about justice and equality. The
conversation is still ongoing, and it’s
clear we need to keep a close eye
on how wealth and political power
influence justice. If we want a future
where justice reform actually
happens, we need to address these
issues, especially with how quickly
the cryptocurrency compliance
landscape is changing.
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Chuck Schumer caves, won’t block GOP plan to avert government shutdown in
dramatic U-turn
The parents of FTX founder Sam Bankman-Fried are exploring ways to obtain a pardon from
President Trump for their disgraced crypto-billionaire son who is currently serving a 25-year prison
sentence, according to a report.
Joseph Bankman and Barbara Fried, both Stanford Law School professors, have met with lawyers
and other figures in Trump’s orbit about a clemency deal for Bankman-Fried, 32, who was found
BREAKINGNEWS
SBF’Sparentsexploringwaystoget
Trumppardonfordisgracedcrypto-
kingson:report
US NEWS
By Zoe Hussain
Published Jan. 31, 2025, 3:24 p.m. ET
152
14.03.2025, 10:10 SBF'S parents exploring ways to get Trump pardon for disgraced crypto-king son: report
https://nypost.com/2025/01/31/us-news/sbfs-parents-exploring-ways-to-get-trump-pardon-for-disgraced-crypto-king-son-report/ 1/12

guilty of stealing more than $8 billion from customers of his now-bankrupt cryptocurrency
exchange in November 2023, Bloomberg reported.
It is unclear if the couple has reached out directly to the White House to discuss a pardon,
according to the outlet.
The White House, Bankman and Fried and a lawyer for SBF, who also filed a legal appeal on his
2023 charges tied to the collapse of FTX, did not respond to the outlet’s request for comment.
The Post has also reached out for comment.
Joseph Bankman and Barbara Fried are reportedly exploring ways to obtain a pardon from President Trump
for their convicted crypto-fraudster son, Sam Bankman-Fried.
Gabriella Bass
4
EXPLOREMORE
Illegal migrant on Long Island beat his 2-month-old daughter to
death because he didn't believe she was his baby: cops
Trump’s swift pardon of Silk Road founder Ross Ulbricht has encouraged a slew of white-collar
convicts, like Bankman-Fried, to put their cases in front of the president, the outlet said.
Bankman-Fried has claimed his sentence imposed in March 2024 was “draconian” because FTX
clients got back most of the money they lost and continually asserted he was a victim of market
downturn.
Former FTX executive, Ryan Salame, who was sentenced to seven and a half years in prison for
campaign finance law violations, is also seeking a pardon, Bloomberg reported.
It is yet to be seen if SBF would have an easier time bargaining for a pardon than Ulbricht, a so-
called champion of the free market. Trump has a reputation for supporting cryptocurrencies — with
the industry soaring since he’s taken office.
Cops now investigating whether Pitt student on spring break in
Dominican Republic was victim of foul play
Congressman dead at 77, second House Dem to pass away this
Congress

Bankman-Fried has claimed his 25-year sentence imposed in March 2024 was “draconian.”
Alec Tabak
4
It is unclear whether Bankman-Fried’s parents have reached out directly to the White House to discuss a
pardon.
4
He was also adjudicated for sexual assault and defamation lawsuits brought by New York writer E.
Jean Carroll by the same judge who sentenced Bankman-Fried, US District Judge Lewis A.
Kaplan.
The tech mogul was found guilty on all seven fraud and conspiracy charges for his scheme to
swipe money from users of his FTX exchange to pay off debts at his failing hedge fund Alameda
Research and purchase lavish real estate.
This cash grab led to the collapse of Bankman-Fried’s crypto empire, leaving thousands unable to
withdraw their funds.
Kaplan granted the former billionaire the 25-year sentence in March 2024 — less than one-fourth
of the 110-year max that Bankman-Fried faced and well under the 40-to-50 years prosecutors
suggested.
Getty Images
SBF is currently housed in a 15-man protective custody unit reserved for those who need
special security at Brooklyn’s notorious Metropolitan Detention Center.
Obtained by Tiffany Fong
4

SBF is currently housed in a 15-man protective custody unit reserved for those who need special
security at Brooklyn’s notorious Metropolitan Detention Center.
What do you think? Post a comment.
Others in the special unit include disgraced rapper Sean ‘Diddy’ Combs and alleged the United
HealthCare CEO killer, Luigi Mangione.
FILED UNDER CRYPTOCURRENCY, DONALD TRUMP, FTX, PARDONS, SAM BANKMAN-FRIED,
1/31/25
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REGULATORS· SAM BANKMAN-FRIED
Sam Bankman-Fried’s day in court is nearly here.Who are the
key players in the blockbuster trial of the former CEO of FTX?
BY
September 29, 2023 at 4:00 PM GMT+1
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14.03.2025, 11:35 Sam Bankman-Fried’s day in court is nearly here. Who are the key players in the blockbuster trial of the former CEO of FTX? |…
https://fortune.com/crypto/2023/09/29/sam-bankman-fried-ftx-court-trial-joseph-bankman-barbara-fried-damian-williams-cohen-gresser-caroline-… 1/32

From left: Former FTX executive Ryan Salame; ex–engineering chief Nishad Singh; cofounder Sam Bankman-Fried; and his
parents, Barbara Fried and Joseph Bankman.
FROM LEFT: YUKI IWAMURA—BLOOMBERG/GETTY IMAGES; BOB VAN VORIS—BLOOMBERG/GETTY IMAGES; YUKI IWAMURA—
BLOOMBERG/GETTY IMAGES; DAVID DEE DELGADO—GETTY IMAGES; MICHAEL M. SANTIAGO—GETTY IMAGES
We’re almost a year into the spectacle that is Sam Bankman-Fried’s sudden turn from
crypto boy genius to (alleged) crypto criminal. And it’s certainly been a story of theatrical
proportions, as the media (Fortune included) have cataloged every step in the saga—from
the collapse of crypto exchange FTX in November to the revocation of the former CEO’s
bail in August for allegedly tampering with witnesses.
As we approach the eve of one of the most high-profile white-collar criminal trials in
recent memory, let’s take a look at the main protagonists and antagonists in a sprawling
case that’s captivated countless eyeballs in the cryptoverse—and beyond.
The defendant
Listen to the article now
1.0x
00:00 10:36
10 10
Powered by: Trinity Audio
Bankman-Fried’s story—like that of Elizabeth Holmes, the latest tech icon turned inmate
to capture the public’s ire and imagination—begins at Stanford University.
The future (and now former) CEO of FTX was born to two Stanford law professors in Palo
Alto. He was a classic quant, who rode his talents first to a degree at MIT and then to a
lucrative job at Jane Street, the high-frequency trading firm that relies not on one gutsy
bet but on millions of calculated, risk-averse trades.
Bankman-Fried, who subscribes to the philosophy of effective altruism, a belief in using
limited resources to do the most good, had an appetite for risk, and in 2017 he left Jane
Street to found Alameda Research, a hedge fund that used a similar quantitative-first
approach—but for crypto.
Alameda’s tenure was rocky, but it cashed in on the crypto frenzy, including arbitrage
opportunities in the price of Bitcoin between the U.S., Japan, and South Korea. In 2019,
Bankman-Fried used that momentum to launch FTX. The crypto exchange grew
exponentially, becoming one of the largest in the world and worth $32 billion as of its last
funding round.
But in 2022, as the broader crypto market crashed, so did Alameda and FTX. In November,
CoinDesk cast doubt on the health of Alameda’s crypto holdings, and after Binance’s CEO,
Changpeng Zhao, said he was skeptical of FTX’s solvency, there was a bank run that FTX
couldn’t withstand. On Nov. 11, the exchange declared bankruptcy, and a month later the
Justice Department charged Bankman-Fried with fraud.
The defense

Sam Bankman-Fried’s defense lawyers: Christian Everdell (left) and Mark Cohen.
PHOTO ILLUSTRATION BY FORTUNE; EDUARDO MUNOZ—REUTERS
Representing Bankman-Fried in October against the federal government’s charges are
Mark Cohen and Christian Everdell, two lawyers with decades of experience and a roster of
well-known former clients.
Cohen and Everdell are both former federal prosecutors. Cohen went to Cornell as an
undergraduate and the University of Michigan for law school; he then served as an
assistant attorney in the Eastern District of New York from 1990 to 1995. Everdell went to
Princeton and then Harvard for law school; he served as an assistant attorney from 2007
to 2016 in the Southern District of New York, the same office now prosecuting SBF.
During his stint as a federal prosecutor, Everdell was part of a team that helped bring
down the infamous drug kingpin “El Chapo,” and both he and Cohen were later part of the
defense team that represented Ghislaine Maxwell, who was sentenced in 2022 to 20 years
in prison for her role in helping Jeffrey Epstein sexually abuse children. Cohen, who in
2002 started his eponymous firm, Cohen & Gresser, also represented Goldman Sachs in a
lawsuit dismissed in 2012 in regards to a stock-trading dispute as well as an ongoing case
filed in 2010 that alleges systemic sexism at the financial giant.
The government
U.S. Attorney for the Southern District of New York Damian Williams.
PHOTO ILLUSTRATION BY FORTUNE; CHIP SOMODEVILLA—GETTY IMAGES
White-collar criminal cases like Bankman-Fried’s are complicated, interwoven affairs, and
teams, not just one attorney, prosecute defendants.
However, the buck stops with the boss, and for the Southern District of New York, which
has an extensive track record of successful white-collar criminal prosecutions like those of
Bernie Madoff or Trump fixer Michael Cohen, that buck stops with Damian Williams.

When President Joe Biden appointed Williams, 43, as U.S. Attorney for the Southern
District in 2021, he became the first Black attorney to head the office in its more-than-two-
centuries-long history. After his confirmation, Williams, who earned degrees from Harvard
and then Yale before spending the majority of his career as a prosecutor at the Southern
District, soon took on a string of high-profile cases. These include the prosecutions of
Ghislaine Maxwell, Bankman-Fried, and now Sen. Robert Menendez, who was recently
charged with bribery.
Williams manages a staff of approximately 450 and is likely not mired in the daily
minutiae of the prosecution of crypto’s former boy wonder, two former Southern District
attorneys told Fortune. His supervision is mediated through a number of middle
managers, including Andrea Griswold, his deputy; Daniel Gitner, chief of the criminal
division; and Matt Podolsky and Scott Hartman, chiefs of the office’s securities and
commodities division. And then there are the line prosecutors, like Danielle Sassoon and
Nicolas Roos, who will actually appear in court and argue the case in front of the jury.
That doesn’t mean Williams isn’t keenly aware of the case’s intricacies and what a
successful prosecution would mean for his legacy. “Today’s guilty plea,” he said in
reference to a recent deal FTX lieutenant Ryan Salame struck with the Southern District,
“reflects the commitment I made in December that my office would continue to pursue
swift justice against individuals at FTX and its affiliates.”
The lieutenants
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FROM HAIER SMART HOME
From left: Former head of engineering at FTX Nishad Singh; ex–Alameda Research chief Caroline Ellison; and ex–FTX exec
Ryan Salame.
PHOTO ILLUSTRATION BY FORTUNE; SINGH: BOB VAN VORIS—BLOOMBERG/GETTY IMAGES; ELLISON: TWITTER/@CAROLINECAPITAL;
SALAME: SPENCER PLATT—GETTY IMAGES
Who will testify at trial is still up in the air—the government submitted a list of over 50
potential witnesses, according to a recent filing—but Sam Bankman-Fried’s former
lieutenants likely will play key roles.
In December, the government announced that Caroline Ellison, the former CEO of
Alameda Research and Bankman-Fried’s ex-girlfriend, as well as Zixiao (Gary) Wang, an

FTX cofounder who grew up in Silicon Valley with Bankman-Fried, both agreed to plea
deals. Nishad Singh, another cofounder, capitulated two months later in February, and as
of September, Salame, co-CEO of FTX’s Bahamas subsidiary, is the latest to fall.
While it’s unclear whether all four will take the witness stand, Ellison, Wang, Singh, and
Salame all were high-powered executives in Bankman-Fried’s empire, and their pleas
proved coups for prosecutors who’ve continually ratcheted up the pressure on Bankman-
Fried and his lawyers.
Ellison, especially, has become a focal point of the case, both because of her centrality to
what ultimately felled FTX—Alameda Research used funds from FTX customers to make
risky bets—and because she has become one of Bankman-Fried’s scapegoats and is,
indirectly, the reason he’s in jail.
In July, the New York Times published an article on private diary entries written by
Ellison during her time at Alameda. Prosecutors alleged that Bankman-Fried leaked the
writings to the Times in an attempt to “publicly discredit a government witness,” and
asked that his bail be revoked. In August, the judge overseeing Bankman-Fried’s trial
granted the prosecutors’ motion, and the former FTX CEO has spent the past month and a
half in jail.
The parents
Barbara Fried (left) and Joseph Bankman
PHOTO ILLUSTRATION BY FORTUNE; STEPHEN YANG—BLOOMBERG/GETTY IMAGES; EDUARDO MUNOZ—REUTERS
When the U.S. extradited Bankman-Fried in December, his parents attended a hearing at
the Magistrates Court of the Bahamas, seated in the third row, according to a recent New
Yorker article. Almost one year later, Allan Joseph Bankman and Barbara Fried will—odds
are—appear in court again to support their son.
But the Bankman-Fried family, which not only includes the former FTX CEO’s parents but
also his younger brother, Gabe, were not mere observers of the crypto exchange’s rise and
fall. They were active participants in and beneficiaries of Bankman-Fried’s largesse.
Bankman, the father, and Fried, the mother, both taught law at Stanford. (Fried is now
retired.) Bankman specialized in tax law; Fried specialized in legal ethics, and discussions
of philosophy and politics were common at their dinner table.
As recent features in Bloomberg Businessweek and The New Yorker detail, once Bankman-
Fried’s crypto empire grew, FTX became a family business. Bankman became a salaried
employee at FTX and went on sabbatical from Stanford to fully support the crypto
exchange. And Fried, to a lesser extent, was also involved, appearing at dinners with staff
and sometimes mediating between her son and his employees.
In September, in an attempt to claw back funds for the bankruptcy, the FTX estate sued
both parents and alleged that they “siphoned millions of dollars” from the exchange for
“their own personal benefit.”
Bankman and Fried, though, believe the lawsuit is meritless. “This is a dangerous attempt
to intimidate Joe and Barbara and undermine the jury process just days before their child’s
trial begins. These claims are completely false,” said Sean Hecker, counsel for Joseph
Bankman, and Michael Tremonte, counsel for Barbara Fried, in a statement shared with
Fortune.

The judge
U.S. District Court Judge Lewis Kaplan
PHOTO ILLUSTRATION BY FORTUNE; JOHN MARSHALL MANTEL—THE NEW YORK TIMES/REDUX
The adult in the room presiding over the legal back-and-forth among Bankman-Fried, his
lawyers, his parents, star witnesses, and the government is the honorable Judge Lewis A.
Kaplan.
President Bill Clinton named Kaplan, a Harvard law school graduate who spent most of his
career prior to his judgeship in private practice, to federal district court in 1994. Since
then, Kaplan, 78, has presided over his fair share of high-profile trials and complex cases.
These include writer E. Jean Carroll’s recent civil suit against former President Donald
Trump, where Kaplan repeatedly rebuffed requests from Trump’s defense team to delay
trial. Before that, the federal judge presided over a civil trial against actor Kevin Spacey for
his alleged sexual abuse of a 14-year-old; another civil case against Prince Andrew for the
British royal’s alleged sexual abuse in connection with Jeffrey Epstein; and the prosecution
of Ahmed Ghailani, a Guantanamo Bay detainee who was sentenced to life in prison.
Known for not being “moved by public sentiment,” according to an April profile by the
New York Times, Kaplan has a no-nonsense reputation. Bankman-Fried’s lawyers have
repeatedly pleaded with the judge to grant him temporary release from jail before and
during the trial. Kaplan remains unmoved.
https://fortune.com/crypto/2023/09/29/sam-bankman-fried-ftx-court-trial-joseph-bankman-barbara-fried-damian-williams-cohen-gresser-caroline… 10/32
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https://www.wsj.com/us-news/law/why-are-we-so-obsessed-with-sam-bankman-frieds-parents-14eef581
U.S. LAW THE SATURDAY ESSAY
Why Are We So Obsessed With Sam
Bankman-Fried’s Parents?
Theoperaticfamilysagashowedusnotjustthederangingeffectofparentallovebut
thelimitsofprivilegeandgoodintentionsinsavingourchildrenfromthemselves
By Katie Roiphe
Nov.10,20235:30amET
During the trial for disgraced crypto-wunderkind Sam Bankman-Fried, the courtroom artist
did an inspired, almost abstract evocation of his parents at the moment of the crushing
verdict. His father is bent over, white head in his hands, his mother is covering her face; the
shadowing of their dark clothes merges them into a single mountain of unspeakable grief.
Journalists in the room were equally riveted by their reaction, writing about Barbara Fried
“crumpling” and Joe Bankman “doubling over” and of them “holding each other up.”
Covering their faces would not shield them from the intense scrutiny aimed in their
direction.
As Stanford law professors, they are an unlikely couple to be watching their son remove his
tie and shoelaces as he is taken off to jail. Fried taught legal ethics, and Bankman has focused
on financial regulation—details that would seem a little heavy-handed in their irony if they
were in a novel someone was writing.
The wildest dreams and worst nightmares of a certain type of parent are entangled in the
SBF story. Their child succeeded beyond their expectations and rebelled slightly by entering
the world of finance, but upheld their beliefs by giving away huge portions of that money, but
then flouted those expectations again by becoming a convicted criminal.
14.03.2025, 11:33 Why Are We So Obsessed With Sam Bankman-Fried’s Parents? - WSJ
https://www.wsj.com/us-news/law/why-are-we-so-obsessed-with-sam-bankman-frieds-parents-14eef581 1/6

ThecourtoomsketchofBarbaraFriedandJosephBankmanreactingtotheverdictintheirson’sfraudtrial,Nov.
2.PHOTO:JANEROSENBERG/REUTERS
Even as the evidence against him mounted, his mother’s fierce faith in him was absolute. As
she told Sheelah Kolhatkar of the New Yorker in a lengthy piece last September, the whole
family cares “about only one thing, which is Sam’s innocence.” She was so certain of his
innocence that she didn’t even ask him if he did the things he is accused of. Over the course
of the ordeal, she lost 10 pounds.
It was astonishing to think of these very smart people sitting through the trial and continuing
to believe their son is innocent in the face of overwhelming evidence to the contrary. Avid
trial watchers were gripped by the immensity of the self-deception, by how completely
impossible it seemed for them to see their son with anything like rational judgment.
Bankman said, “I think most parents would much rather die, frankly, than see their child
accused of such horrible things.”
Part of the fascination of the trial was the inevitable confrontation between parental love and
harsh reality. There was, in the press and the public, a hunger for Bankman and Fried to
process that their son had committed the crimes he was accused of, which, of course, they
may never do. In the Verge, a reporter actually asserted, “Whatever delusions they may have
had about their son’s innocence dissipated over the course of trial,” but there is no evidence
that this is true.
The spectacle raises the unsettling question: Can any parent see their child clearly? One
wonders if the idées fixes we have about our children—“Sam will never speak an untruth. It’s
just not in him,” Fried said—are often delusions or fantasies. If we are all this blinkered or
blind on the subject of our sons and daughters. If we will follow them to any dark place they
go. Sam was pretty conspicuously and flagrantly lying on the stand, but his parents may
never believe that.
The story of SBF’s parents shows us how deranging parental love is. The values they held
were upended. Their entire selves were reorganized by this calamity. They have been forged
into different human beings.
Bankman and Fried’s friends and colleagues are often quoted calling them “ethically
fastidious” or “deeply ethical,” but these ethics seemed to fall away in the face of their son’s
improbable success. The couple had not become partners in big law firms; they had chosen a
less lucrative, more intellectually stimulating, principled path. And yet, the proximity to
enormous, dizzying sums of money seemed to stir their imaginations.
Even before SBF was appearing on the cover of magazines as one of the world’s youngest
billionaires, the father began working for his son’s companies. Bankman liked to say that he
was “the adult in the room,” but he was also the lawyer in the room. Former employees were
quoted by Bloomberg saying that SBF “consulted his dad constantly,” and he was on several
group chats charting the demise of FTX.
There was talk in the trial about how the company didn’t have a “risk-management team,”
but aren’t your parents supposed to be your risk-management team? Why didn’t Bankman
see what was going on or pressure Sam to put lawyers with regulatory experience in place to
make sure everything was above board? One answer that suggests itself is that he was
blinded by the huge, disorienting amounts of money; he didn’t want to see what was going
on.
Bankman told the New Yorker that he and Fried signed the deed to a $16 million oceanfront
Bahamas house “in error.” But for Stanford law professors to sign a document like that by
mistake stretches credulity. According to their representatives, they later had the company
SamBankman-FrieddepartsthecourthouseinManhattanafterabailhearing,July26.PHOTO:JUSTIN
LANE/EPA/SHUTTERSTOCK

assure them that it would take ownership, but the excitement of the fabulous property seems
to have temporarily addled their judgment. There is also the now infamous email in which
Bankman complains to his son (“Gee Sam, I don’t know what to say here”) about his
$200,000 salary, saying he was expecting a million dollars. This does not sound like
someone leaning toward the austere intellectual pleasures of principled, academic life.
One has to imagine that the celebration of Sam’s wild and bewildering success contained
within it a feeling of relief. There had to be points in Sam’s childhood where his parents were
worried about him. He had no friends. He did not seem to be neurotypical (Sam had to teach
himself to smile so other people wouldn’t be put off by him, according to Michael Lewis’s new
book). He was dangerously bored by school. He played too many videogames. They must
have worried about how he would find a place in the world, if someone could love him or he
could love someone else, if he would ever have friends. One moment where Fried broke down
was when the prosecution showed a photograph of her son and his friend Gary Wang at
happier times at college, before Wang betrayed him by testifying for the government.
BarbaraFriedandJosephBankmanoutsidethecourthouseontheopeningdayoftheirson’strial.PHOTO:CRAIG
RUTTLE/ASSOCIATEDPRESS
One can imagine Bankman and Fried reassuring each other about young Sam late at night:
He’s so smart, he’ll be fine. They were the kind of parents who believe in the transcendent
power of intelligence, that it operates as its own kind of protective charm or salvation. He
would find his way because of that.
They also must have had faith in the ability of their world to protect him: the house on the
Stanford campus nestled in the redwoods and cactuses; the crowded dinners with academics
debating philosophical tenets and discussing the news over plates of pasta; the math camp in
summers, “math circle” on Saturdays; the enrichment classes before school. They must have
felt that their resources, their intelligence, their dedication to causes outside themselves
would protect this slightly unusual child.
Appeared in the November 11, 2023, print edition as 'Why Are We So Obsessed With Sam Bankman-Fried’s
Parents? For Parents, a Cautionary Tale In the SBF Saga'.
But now they, like the rest of us, are reading headlines like “How Sam Bankman-Fried’s Elite
Parents Enabled His Crypto Empire.” Their son is facing a maximum of over 100 years in
prison, and it seems unlikely that they will see him sitting around a dinner table again, let
alone holding his first child.
One fascination of this operatic family saga is what it reveals about the ultimate futility of
privilege and the limits of our ability to truly save or even help our children. You can do all
the right things, correctly identify and nurture your child’s strengths, infuse in them morally
upstanding values, and they can still crash and burn. What we are seeing in this story is the
failure of good intentions, or good values or substantial resources to protect a young person.
The chatter surrounding his parents necessarily involves a lot of speculation and armchair
critique. Did they ignore some warning signs about his challenges? Did the philosophical
back and forth at the dinner table detach him from certain realities? Did they fail to impress
upon him the consequences of his utilitarian ideas—to instill the principle that the ends don’t
always justify the means—because they were so proud of his precocity? Was their sin the
blinding pride they took in their extraordinary child? Did they give him too great a sense of
his own specialness? Should they have made absolutely sure he understood the difference
between the videogames he was constantly playing and the money he was moving around in
real life? Did they allow him out into the world with too much confidence?
Many of us long to discover some fatal misstep, something Bankman or Fried did wrong as
parents, some way in which they could have acted differently to save their brilliant but
dangerously arrogant son. Say, limiting his screen time or communicating more clearly that
rules apply to everyone, even the children of Stanford professors.
Yet we may only find how helpless parents are to ensure the happiness or even basic well-
being of their child. “Saving Sam is the major project of our lives,” Fried said, and it is also
the project at which they will most spectacularly fail.
Katie Roiphe is director of the Cultural Reporting and Criticism Program at New York
University and writes the “Personal Space” column for The Wall Street Journal. She is the
author, most recently, of “The Power Notebooks.”

HOME / NEWS / CRYPTO / NEWS /
FTX SENTENCES REDUCED, BUT SBF STUCK—NOW HIS PARENTS ARE ASKING DONALD TRUMP FOR A PARDON
 4 MIN READ
FTXSentencesReduced,ButSBFStuck
—NowHisParentsAreAskingDonald
TrumpforaPardon
PUBLISHED JANUARY 31, 2025 8:25 AM
BY GIUSEPPE CICCOMASCOLO EDITED BY INSHA ZIA
Former FTX execs get sentence reductions for cooperation; Sam Bankman-Fried (in
image) remains with 25-year term. | Credit: Fatih Aktas/Anadolu Agency via Getty
Images.
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14.03.2025, 10:12 FTX Sentences Reduced, But SBF Stuck—Now His Parents Are Asking Donald Trump for a Pardon | CCN.com
https://www.ccn.com/news/crypto/ftx-sentences-reduced-sbf-parents-trump-pardon/ 1/9
  

SeveralformerFTXexecutiveshavebeengrantedreducedsentencesor
leniencyinexchangeforcooperatingwithauthoritiesfollowingthecrypto
exchange’scollapse.
However,SamBankman-Fried,thefounderandformerCEOofFTX,has
notbeenaffordedthesameconsideration.Despitethis,therearereports
thathisparentsareactivelyseekingawaytohavehissentenceoverturned,
possiblythroughapresidentialpardon.
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Collapse

LeniencyforCooperating
ThelegalconsequencesofFTX’scollapsehavebeensevere,butsome
formerexecutiveshaveseentheirsentenceslightenedduetotheir
cooperationwithfederalauthorities.
CarolineEllison,theformerCEOofAlamedaResearch,receivedasentence
reductionafterassistingprosecutorsintheirinvestigationofthecollapse
KEY TAKEAWAYS
SeveralformerFTXexecutivesreceivedreducedsentencesor
leniencyaftercooperatingwithauthorities.
SamBankman-Fried,theformerCEO,didnotseeanyreductionin
his25-yearsentence.
Hisparentsarereportedlyexploringwaystosecureapardonfor
him,potentiallythroughformerPresidentDonaldTrump.

  
reductionafterassistingprosecutorsintheirinvestigationofthecollapse.
Initiallysentencedtotwoyearsinprison,shebeganservinghertermin
September2023,butduetohercooperation,herreleasedatewasmovedup
bythreemonths.
RyanSalame,anotherformerFTXexecutive,hadhissentencereducedby
oneyear.Originallysentencedto7.5years,Salameisnowexpectedtobe
releasedonMarch1,2031,benefitingfromgoodbehaviorcreditsunderthe
FirstStepAct,a2018lawaimedatreformingfederalsentencing.
GaryWang,FTX’sformertechnologychief,receivedalenientsentencein
November,beinggrantedtimeservedandthreeyearsofsupervisedrelease.
Similarly,NishadSingh,theformerengineeringchiefofFTX,alsohadhis
sentencelightenedaftercooperatingwithinvestigators.
Whiletheseindividualsbenefitedfromleniency,SamBankman-Friedhas
notenjoyedthesametreatment.
SBF’s25-YearSentence
SamBankman-Fried,thearchitectoftheFTXdisaster,wassentencedto25
yearsinprisonforfraudfollowingthecollapseofhiscryptoexchange.
Asofnow,hehasnotreceivedanyreductiontohissentence,despitehis
appealandassertionsthatthepunishmentistooharsh,particularlysince
heclaimsmostofFTX’scustomershavebeencompensatedfortheirlosses.
ThoughBankman-Fried’slegalteamcontinuestofighthisconviction,
there’sapossibilityhisfatecouldchange—outsideofthecourts.
PardonPush:Bankman-Fried’sParentsSeek
Clemency
SourcesclosetoBankman-Fried’sfamilyreportthathisparents,Joseph
BankmanandBarbaraFried,areactivelyexploringavenuestosecurea
  

BankmanandBarbaraFried,areactivelyexploringavenuestosecurea
pardonfortheirson.
Thecouple,bothStanfordUniversityprofessors,havereportedlymetwith
formerPresidentDonaldTrump’salliestodiscussclemencyoptions.
However,itremainsunclearwhethertheyhavereachedoutdirectlytothe
WhiteHouseortheTrumpadministration.
Bankman-Fried’sparentsareattemptingtoappealtoTrump’shistoryof
grantingpardonstowhite-collarcriminals,agroupthatincludesfigures
suchasformermediamogulConradBlackandpoliticalstrategistRoger
Stone.
TheideaofapardongainedmomentuminDecember,fueledbyspeculation
aboutBankman-Fried’spoliticalconnections,includinghistiestothe
DemocraticParty.
ElonMuskalsofueledspeculation,tweetingthathewouldbe“shocked”if
apardondidn’toccur.However,nosignificantpoliticalfigures,including
PresidentJoeBiden,haveshownpublicsupportforthemove.
Fornow,Bankman-Friedcontinuestoservehis25-yearsentence,buthis
parents’effortstoseekclemencymaykeepthedooropenforpotential
changestohisfate.
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POLICY
Sam Bankman-Fried’s Parents Seek Presidential
Pardon for Their Son: Report
Joseph Bankman and Barbara Fried have engaged with individuals connected to
Trump's inner circle to discuss potential clemency for their 32-year-old son.
BY SHAURYA MALWA | EDITED BY PARIKSHIT MISHRA
Updated Feb 3, 2025, 10:41a.m. UTC
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14.03.2025, 10:10 Parents of Disgraced FTX Founder Sam Bankman-Fried Want Donald Trump to Pardon Their Son
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FTX founder Sam Bankman-Fried after returning to court In the Bahamas ( Joe Raedle/G… Read More
What to know:
Sam Bankman-Fried’s parents are exploring pardon options for the prisoned
crypto fraudster.
Bankman-Fried's FTX went bust in November 2022 after a CoinDesk scoop said
the platform's sister concern, Alameda Research, was on shaky financial footing.
It was later found that Alameda used backdoor code to raid billions in customer
funds from FTX — an arrangement helmed by Bankman-Fried and other Alameda
founding members.
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The parents of prisoned crypto fraudster Sam Bankman-Fried are reportedly
exploring how to secure a presidential pardon from President Donald Trump for their
son, according to a Bloomberg report.
Joseph Bankman and Barbara Fried, both professors at Stanford Law School and part
of FTX’s inner circle, are reportedly engaging with individuals connected to Trump's
inner circle, according to the report.
Story continues
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In recent weeks SBF's parents have tried to engage with the Trump administration to
discuss potential clemency for their 32-year-old son, who was handed a 25-year prison
sentence after being convicted of fraud. The specifics of whether direct
communications with the White House have occurred remain unclear, per
Bloomberg.
The appeal for a pardon leans on Trump's recent history of using his clemency powers
to free widely-supported individuals, such as Silk Road founder Ross Ulbricht. Unlike
Ulbricht, however, Bankman-Fried lacks widespread public support, though he
argues his sentence is excessively harsh, especially since most FTX customers have
recovered their financial losses.
The recovery is based on the crypto-owned by the customers at the time of FTX's
demise.
Bankman-Fried's FTX, formerly the world's third largest crypto exchange, went bust
in November 2022 after a CoinDesk scoop said the platform's sister concern, Alameda
Research, was on shaky financial footing.
It was later found that Alameda used backdoor code to raid billions in customer funds
from FTX — an arrangement helmed by Bankman-Fried and other Alameda founding
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TECH / CRYPTO
Sam Bankman-Fried gambled on
a trial and his parents lost
Over five weeks, the FTX founder’s parents watched from the galleys
— deluded, humiliated, and finally, defeated.
by Elizabeth Lopatto
Nov 3, 2023, 2:34 AM GMT
| Comments (230 New)
230
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14.03.2025, 10:09 Sam Bankman-Fried gambled on a trial and his parents lost | The Verge
https://www.theverge.com/2023/11/2/23944485/sam-bankman-fried-guilty-verdict-parents 1/10

Elizabeth Lopatto is a reporter who writes about tech, money, and human behavior. She joined The Verge
in 2014 as science editor. Previously, she was a reporter at Bloomberg.
The jurytook a little over four hours to reach a verdict.WhenJoseph Bankman
and Barbara Fried,the defendant’s parents,came into the courtroom,they looked
frightened.Bankman put his arm around Fried as they sat down on thewooden
benches.Fried put her head in her hands.
Sam Bankman-Fried stood to hear the jury’s verdict.After the first“guilty”was
read aloud—forwire fraud—his father doubled over.His mother’s hands rose to
cover much of her face,either to stifle tears or to hide them.As the judge thanked
the juryfor their service,Barbara Fried recovered herself enough to gently rub
Joseph Bankman’s back.
TECH / CRYPTO
Sam Bankman-Fried gambled on
a trial and his parents lost
Over five weeks, the FTX founder’s parents watched from the galleys
— deluded, humiliated, and finally, defeated.
by Elizabeth Lopatto
Nov 3, 2023, 2:34 AM GMT
| Comments (230 New)
230
230
Our news stories are free to read. To get all access to The Verge, subscribe now.
SUBSCRIBE NOW
The jury left,and the courtroom rose.Joseph Bankman and Barbara Fried had
their arms around each other as though theywere holding each other up.As the
judge dealtwith a few administrative matters—dates for appeals,the nexttrial,
sentencing—Fried stared up atthe ceiling.
When the judge leftthe bench,Bankman and Fried moved closer to their son,still
separated by a wooden barrier in the courtroom.Theywere ringed by a half-moon
of reporters,all silent,all holding pens over notebooks.
Bankman-Fried’s backwas to his parents.Hewas talking to his lawyers,Mark
Cohen and Chris Everdell.He appeared to be shaking.He did not look backto see
his parents until hewas being escorted out.As he glanced back,Fried crumpled,
and her husband steadied her.
Sam Bankman-Fried, the founder of failed cryptocurrency exchange FTX, has been
found guilty on seven counts including charges of wire fraud. FTX was a fraud “from
the start,” the Securities and Exchange Commission alleged — with a “multi-billion-
dollar deficiency caused by his own misappropriation of customer funds.”
Follow along for all the latest news and regular updates from the trial.
Photo illustration by Cath Virgina / The Verge | Photo by Bloomberg, Getty Images
ADVERTISEMENT
230

There are some questions about how much Bankman and Fried knew aboutthe
schemes at FTX.Butthere is no doubt in my mind thattheytruly suffered through
the monthlong trial.Whatever delusions they may have had abouttheir son’s
innocence dissipated over the course ofthe trial.Bythe end,I thinkthey knew
howthis was going to go.I think Bankman-Fried did,too.
I have been wondering since opening statements why Bankman-Fried didn’t
simply plead guilty.Sure,he might not get a deal like his co-conspirators,Caroline
Ellison,GaryWang,and Nishad Singh.But pleading guilty,showing himselfto be
sorry,and throwing himself on the mercyof a sentencing judge—well,it could
have played.At minimum,itwould have spared his friends and familythe
humiliation ofthis trial.
I suppose it’s possible that Bankman-Fried is delusional enough to believe himself
innocent,to think he did nothingwrong,and to think a jurywould agreewith him.
But given what else I know about him,I don’tthinkthat’s what happened.
Sam Bankman-Fried loved risk,and he loved to gamble.He knewthat if hewentto
trial,therewas a chance,however small,that he mightwalk away a free man.
He knew that if he went to trial, there was a
chance, however small, that he might walk away a
free man
ADVERTISEMENT
230
Pleading guilty meant guaranteed punishment,and probably prison time.And so
he chose to gamble,not onlywith his own life,butwith his parents’.
Bankman and Fried were respected law professors at Stanford.Bankman worked
on the US tax code,on behalf of low-income people.Fried is known for herwork
on legal ethics,and ran a donor network,Mind theGap,for Democratic causes.
Their FTXentanglement has certainly marred their reputation atthe end oftheir
lives—that $26 million in cash and real estate in 2022 looks verydifferent now.
This is to say nothing ofthe lawsuitfrom the FTXbankruptcyestate,which seeks
to clawback millions.
Bankman-Fried’s failed defensewasn’t cheap—lawyers never are.And therewill
be more bills,as his lawyers seekto appeal theverdict.There may also be a second
trial,scheduled for next March,for some other counts thatwere severed from this
case.
But it’s not justthe money.This trial revealed Bankman-Fried’s fatherwas in 17
Signal group chats associated with FTX,including the“small group chat”thatwas
attempting to stave off FTX’s impending collapse.Joseph Bankman was
mentioned in witness testimony about Bankman-Fried’s meetings with Bahamian
regulators.Should the second trial take place,there is the possibilityfor further
embarrassment.
Bankman and Fried have been vocal in their son’s
defense, as I assume any loving parent would be
230

Bankman and Fried have been vocal in their son’s defense,as I assume any loving
parentwould be.I suppose itwould be easyto demonize them—butwhat parent
wants to believe thattheir child is engaged in large-scale fraud? They probably
still remember him as a toddler.
I don’t knowwhat Bankman-Fried’s sentencingwill be,but I doubt he madeJudge
Lewis Kaplan,whowill be handling his sentencing,especially sympathetic during
his testimony.Bankman-Fried gave evasive answers,was repeatedly instructed to
answer lawyers’questions,and did not,as a general rule,acquit himselfwell.He
didn’t seem repentant—or honest.
Depending on how sentencing goes—it is scheduled for March—it’s possible
both Fried and Bankman will diewhile their son is in jail; they are certainly in the
autumn oftheir lives.Therewas more than Bankman-Fried’s freedom at stake in
that courtroom.
Therewas a hypothetical he posited,whereyou could flip a coin: heads
annihilated theworld,and tails made ittwice as good.Bankman-Fried said he
would take that bet.ForJoseph Bankman and Barbara Fried,I thinkthat is no
longer a hypothetical.Bankman-Fried’s loving parents suffered through a trial
where his closestfriends testified against him,with their every movewatched
intentlyby a galleryof reporters.
There is a reason most peoplewon’tflip that coin: they aren’t selfish enough to
gamblewith other people’s lives.
230 COMMENTS (230 NEW)
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230
Letter from Palo Alto
The Parent Trap
Inside Sam Bankman-Fried’s family bubble.
By Sheelah Kolhatkar
September 25, 2023
14.03.2025, 10:08 Inside Sam Bankman-Fried’s Family Bubble | The New Yorker
https://www.newyorker.com/magazine/2023/10/02/inside-sam-bankman-frieds-family-bubble 1/32

“Sam will never speak an untruth,” his mother said. “It’s just not in him.” Illustration by Keith Negley; Source
photograph from Getty
T
Listen to this story
0:00 / 56:47
he Magistrates Court of the Bahamas, in Nassau, is situated in an
imposing pink-and-white building edged with palm trees. On
December 13, 2022, Sam Bankman-Fried, the former C.E.O. of the now
bankrupt cryptocurrency exchange FTX, arrived there to ask for release on bail
after being indicted on eight criminal charges. Bankman-Fried typically wears
T-shirts and shorts, no matter the occasion; on this day, he wore, like armor, an
ill-fitting navy-blue suit. He’d spent the previous night in jail, where he hadn’t
been given the medication he normally took for his depression. But of greater
concern was the indictment, unsealed that morning in the United States, which
accused him of fraud, conspiracy to commit money laundering, and other
crimes that could lead to more than a hundred years in prison.
The evening before, he and a colleague had been working on their laptops in
the oceanfront penthouse of a resort where he lived when his parents, who were
visiting, called him into a bedroom. Minutes later, according to the colleague, a
group of Bahamian law-enforcement officers, accompanied by members of the
resort’s staff, strode into the apartment. One officer had a warrant for
Bankman-Fried’s arrest.
When the officers entered the bedroom, Bankman-Fried asked for a drink of
water and seemed to gird himself for what was ahead. “I can give you my
passport,” he told a broad-shouldered officer, who in turn suggested that he
might want to bring a jacket with him. Passing his phone, wallet, and college
Save this story

class ring to the colleague, whom he’d asked to try to keep his parents calm,
Bankman-Fried raised his wrists to be cuffed.
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Now, as the court hearing got under way, his parents, Joseph Bankman and
Barbara Fried, sat in the third row, feeling shattered. Bankman told me later, “I
think most parents would much rather die, frankly, than see their child accused
of such horrible things.”
Bankman and Fried have long been popular faculty members at Stanford Law
School, and known for their involvement in liberal causes. When Sam, their
firstborn, was a child, they recognized him as being intellectually exceptional
and emotionally atypical—an often isolated boy who entertained himself with
baseball statistics and math puzzles. In his twenties, Sam achieved international
fame as the head of FTX, a crypto company that he co-founded in 2019, and
that promised to bring a measure of legitimacy to a nascent industry sometimes
associated with money laundering and corruption. He shared a stage with Bill
Clinton and Tony Blair, made the covers of Fortune and Forbes, and persuaded a
range of prominent venture-capital investors to give his company hundreds of
millions of dollars.Ten months before his arrest, FTX was valued at thirty-two
billion dollars. A partner at Sequoia Capital, one of FTX’s biggest financial
backers, posited in an online profile of Bankman-Fried, since deleted, that he
might become the world’s “first trillionaire.”
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The academic community in which Bankman-Fried was raised is a place where
immense wealth is often discussed with suspicion, even when privately courted.
But Bankman-Fried stood out from other young billionaires for his
commitment to the effective-altruism movement, some of whose adherents
believe in trying to earn as much as possible in order to maximize what they
can give away. By the time of his arrest, he had become a major contributor to
public-health and other causes, and one of the biggest personal donors in
American electoral politics.
His parents come from modest backgrounds and have lived in the same house
—a one-story bungalow on the Stanford campus—since the nineties; they
describe themselves as “utilitarian-minded.” As academics, Bankman and Fried
share an interest in using tax law as an instrument of social fairness. When Sam
and his younger brother, Gabriel, were growing up, there was an ongoing
household conversation about what it means to conduct an ethical life, and the
brothers later worked together on philanthropic ventures that Sam funded.
(Gabriel declined to be interviewed for this article.) As Larry Kramer, a former
dean of Stanford Law School, told me, Bankman and Fried “loved that their
children had these commitments that were so idealistic and powerful.”
The rewards of being Sam’s parents were financial as well as reputational. In
2022, he gave them a gift of ten million dollars; a lawsuit filed by FTX’s
bankruptcy estate against Bankman and Fried this September claims that the
money was “plunder[ed]” and came from an account that contained customer
funds.Their attorneys said that the lawsuit’s claims are “completely false.”
Bankman and Fried visited Sam in the Bahamas frequently, sometimes staying
at a sixteen-and-a-half-million-dollar, thirty-thousand-square-foot beach house
in a gated community. In December, 2021, Bankman took leave from Stanford
to work full time at FTX, providing legal, philanthropic, and tax advice for a
salary of two hundred thousand dollars a year, plus expenses.Those expenses
included twelve-hundred-dollar-a-night “hotel stays,” the lawsuit alleges.

“I’m in on crypto because I want to make the biggest global impact for good,”
Bankman-Fried said in an ad that ran in The New Yorker. Like other crypto
evangelists, he professed a belief in the power of digital currencies and
blockchain technology to eliminate corporate middlemen from the financial
system and provide life-changing economic opportunities to the poor. He also
relied on slick advertising to do the talking. In one commercial, a plumber
realizes that he, too, can make bank in crypto with FTX, and the football
legend Tom Brady says, conspiratorially, “You in?”
In March, 2022, a month after an extravagant Super Bowl ad starring Larry
David (with Bankman-Fried’s father hamming it up in the background in a
powdered wig) told viewers not to miss out on FTX’s crypto, the Federal
Reserve began raising interest rates, in part to combat inflation. As money
became more expensive to borrow, the value of many cryptocurrencies
plummeted. Regulators and reporters began revealing that companies in the
industry had been lending money to one another in a closed loop to prop up
the value of their assets.The allegation that Bankman-Fried created his own
closed loop in order to deceive investors and the public is at the crux of the
government’s case against him.
In addition to owning FTX, Bankman-Fried owned the majority of a crypto
hedge fund called Alameda Research, which was run by Caroline Ellison, a
trader whom he sometimes dated. On November 2nd, CoinDesk, an industry
news site, reported that Alameda held almost fifteen billion dollars in
cryptocurrency assets, a large chunk of which was in FTT—a digital token that
FTX had issued.The disclosure raised questions about the true value of
Alameda’s holdings and about the conflict of interest between the two
supposedly independent companies. Changpeng Zhao (generally known as
C.Z.), the C.E.O. of Binance, a crypto competitor, wrote a series of skeptical
tweets indicating that he was dumping his FTT. Alarmed, FTX customers
withdrew six billion dollars in just three days. By November 8th, FTX was so
broke it stopped honoring withdrawal requests.
Some of Bankman-Fried’s employees quit, and he huddled with those who
remained, trying to calm investors and raise money to save the company.
Meanwhile, a former FTX employee told me, “the parents were freaking out
and asking, ‘What about your legal safety?’ ”
“I think there’s probably a picture of it somewhere online.”
Cartoon by Colin Tom
On November 11th, under what Bankman-Fried describes as pressure from
FTX’s lawyers, he agreed to relinquish control of the company to a new C.E.O.
—a decision that he regretted immediately and tried in vain to reverse.The
new C.E.O., quickly installed, was John Jay Ray III, a bankruptcy lawyer who
Open cartoon gallery

F
had overseen the dissolution of Enron; he filed for Chapter 11 and began the
process of formally winding FTX down.
Shortly after Bankman-Fried’s arrest, the Commodity Futures Trading
Commission said in a lawsuit that he’d caused the loss of more than eight
billion dollars in customer assets. Among those reported to be affected were
Tom Brady; his ex-wife, the supermodel Gisele Bündchen; the basketball star
Steph Curry; the billionaire oil investor Robert Belfer; the tennis star Naomi
Osaka; the former Trump spokesman Anthony Scaramucci; a teachers’ pension
fund; and many ordinary investors, including construction workers, small-
business owners, and college students.
In Magistrates Court, Bankman-Fried stared straight ahead as his attorney
argued for his release while his extradition was negotiated, noting that he had
stayed put and tried to “fix things” for customers when he could have fled the
country. A local prosecutor countered that Bankman-Fried was a flight risk,
with the means to charter a private plane. When the prosecutor referred to
Bankman-Fried as a “fugitive,” his mother laughed darkly. Bail was denied, and
eight days later he was extradited to the United States.
Bankman-Fried’s trial is scheduled to begin in New York in early October, and
until recently he was preparing for it while under house arrest in California, at
his childhood home, which is surrounded by redwood trees and cacti. His
parents were back to taking care of him and working to bolster his spirits, as
they’d done when he was a child, but now they were also scrambling to find
legal escape routes from circumstances they say they had failed to anticipate:
that their son, now widely considered a crypto villain, would be facing life in
prison, and that they would be accused of being complicit.
or years, Bankman and Fried have hosted lively Sunday-night dinner
parties at their home, during which discussions range from the global crisis
of democracy to movies and campus gossip. In December, after a New York
judge set their son’s bail at a quarter of a billion dollars, their home was pledged
as security for his release.Two friends also served as guarantors: Andreas
Paepcke, a computer scientist at Stanford, pledged six figures, as did Larry
Kramer and his wife, Sarah, who has since died. In part because Bankman and
Fried had been so supportive when Sarah was going through cancer treatments,
Kramer told me, “I said yes before Joe even finished asking.”
When I visited the family earlier this year, a security guard they’d hired to
comply with the bail terms was sitting outside the house in an S.U.V., asking
visitors to leave their telephones and other electronic devices in their cars.
Inside, Bankman-Fried, wearing an ankle bracelet, had commandeered his
mother’s study. “It’s mostly case prep,” he told me, gesturing toward two
computer monitors. “I mean, there’s not a lot else that I can be doing.”
At thirty-one, he in many ways still looks like a boy: pale and soft with dark
eyes and wild, curly hair, which on that day was flat in the back where he had
slept on it.The desk at which he sat was cluttered with packs of cinnamon
gum, fidget spinners, a mini-fan, deodorant, and a bottle of Adderall. (He was
diagnosed as having A.D.H.D., in addition to depression, years ago.) As we
spoke, he jiggled his knee and shuffled and reshuffled a deck of cards.
The government alleges that Bankman-Fried engaged in fraud and
embezzlement of customer deposits beginning in 2019, and spent those funds
on travel, real estate, speculative investments, personal enrichment, and political
campaigns.The government further alleges that he “caused” the creation of
loopholes in FTX’s computer code which allowed Alameda, his hedge fund, to
borrow money that effectively belonged to customers, and that he conspired to
bribe at least one Chinese official with forty million dollars to unfreeze FTX
assets held in that country.This summer, the U.S. government severed the
bribery and four other charges from the case and added a new one: that he’d
used stolen customer funds to make more than a hundred million dollars in
campaign contributions ahead of the 2022 midterms. “I’m trying not to freak
out too much,” Sam said.
At the keyboard, he opened and shared with me several memos he’d written
since his arrest—documents replete with links, screenshots, assertions, and

intricate explanations that, he claims, will demonstrate his innocence.The gist
of his argument is that he made mistakes but did not knowingly commit
crimes. At worst, he says, he was unaware of things that, as C.E.O., he should
have known about—particularly the facts that Alameda had accumulated
billions of dollars in losses and that FTX customers’ money was being used to
plug the hole.
“Alameda’s position on FTX was substantially bigger than we had realized.
That’s one of the bigger fuckups,” he told me. “Which meant that in fact, if
Alameda were to go down, FTX would be on the hook for a lot more of that
than I had realized.” He said that this prospect did not become clear to him
until shortly before the company collapsed. His defense team now has the task
of convincing a jury that their client, a quantitative savant, missed something of
such importance.
Three of Bankman-Fried’s closest associates have already pleaded guilty and
agreed to coöperate in the case against him: Caroline Ellison, the former
Alameda C.E.O.; Gary Wang, a co-founder of FTX; and Nishad Singh, FTX’s
former director of engineering. In Ellison’s guilty plea, she said that FTX had
granted Alameda unlimited borrowing privileges, and that when loans from
outside lenders were recalled in June, 2022, FTX funds were used to repay
them. She further stated that she conspired with Bankman-Fried to hide the
borrowing from Alameda’s lenders by creating a false set of financial
statements.
Ellison sounded slightly less certain last November, on the day after FTX
stopped honoring customer withdrawals, in a recording likely to be used as
evidence at trial. When a colleague asked her during a staff meeting who had
authorized Alameda’s borrowing, she said, “Um . . . Sam, I guess.” Bankman-
Fried was adamant, in my conversations with him, that prosecutors would not
be able to produce any documents showing him authorizing the unlimited
borrowing, because, he says, there are none.
As I sat with him in the study, his mother, who seemed tense, sometimes passed
by on her way to the kitchen. Fried retired from full-time teaching last year,
hoping to have more time for writing and political activism. After Donald
Trump won the Presidency, in 2016, she co-founded Mind the Gap, a political-
action committee built around Moneyball-style data analytics aimed at flipping
congressional seats from red to blue. When her son was arrested, Fried resigned
from the pac and concentrated on exonerating him. “All four of us care about
only one thing, which is Sam’s innocence,” she later told me.
I asked whether she had ever felt compelled to ask her son if he’d done any of
the things he’d been charged with. She replied no—she didn’t need to ask. Her
son was incapable of dishonesty or stealing, she said. “Sam will never speak an
untruth,” she went on. “It’s just not in him.”
Fried is a leading scholar of legal ethics. Her best-known book, “The
Progressive Assault on Laissez Faire,” is a study of capitalism and the coercive
aspects of free markets. “She’s a brilliant critic,” Debra Satz, the dean of
Stanford’s School of Humanities and Sciences, said, “and the book really picks
apart these debates about freedom and equality.” This year, her intellectual rigor
has been applied to her son’s media strategy, which she considered integral to
his defense—so integral that she and her husband hired a high-powered P.R.
consultant, Risa Heller, to assist them.The couple embarked on a campaign to
spread their perspective: that the press, unfairly assuming that their son is guilty,
has failed to examine weaknesses in the government’s case and the role of
FTX’s lawyers in the company’s downfall.The campaign was not aided by the
September lawsuit against them—a legal action that their attorneys say is a
cynical effort by John Ray to influence the outcome of their son’s trial. Calling
the suit a waste of creditors’ money, Fried said that its real agenda was “to
enflame the jury pool on the eve of Sam’s trial by portraying all of us as a pack
of thieves.”
Robert Gordon, a Stanford Law School colleague, described Fried as one of the
most “ethically fastidious” people he knows. “She seems so sure,” he said of her

B
faith in her son, “and the way that she thinks through ethical problems is just so
careful.This, of course, is the big mystery at the heart of all this.”
During a hike in the foothills of the mountains near the family’s home, Fried
described herself to me as “emotionally reserved, like Sam,” shortly before she
teared up. “I don’t care what is said about me, Joe doesn’t care what is said about
him,” she said. “Saving Sam is the major project of our lives.” She had lost ten
pounds since his legal troubles began, and a recent eye operation had
temporarily affected her vision, but she seemed intent on projecting her resolve.
Wearing a baseball cap and a bright-red backpack, Fried charged up a hillside,
shoes crunching on the dirt. In two hours in the blazing sun, she didn’t take a
sip of water.
efore the collapse of FTX, Bankman-Fried led a heady life. “I’d go to a
conference, and I’d end up, like, cancelling a meeting with a head of state,
because there was a conflicting request from a different head of state that
seemed more important,” he told me. “And, you know, there were celebrities all
around—and I really don’t give a shit about celebrities. But it is nonetheless a
little bit surreal the first few times that it happens.”
Bankruptcy documents say that he and his companies spent approximately two
hundred and fifty million dollars to buy thirty-five properties in the Bahamas,
and reportedly chartered jets to deliver Amazon orders from Miami to island-
based employees. In our conversations, Bankman-Fried said that such
seemingly profligate expenses were part of an effort to attract talented workers,
as many tech-company leaders before him had done. “I did try to make FTX a
nice place for people to work,” he said.
Shuffling his cards, he insisted that the only real estate he purchased for himself
cost “about two million”—negligible by tech-C.E.O. standards. “I didn’t think it
would have been correct for me to live an extremely lavish life style, nor would I
have enjoyed it,” he added. In the Bahamas, by his and others’ accounts, he did a
lot of his own shopping and sometimes cooked for some of his employees.
(Beyond Burgers and Beyond Sausages were a staple, he said.) He also paid
himself a two-hundred-thousand-dollar salary and never took bonuses, he told
me. In court filings, the FTX bankruptcy estate said that it had traced
$2.2 billion in payments and loans to Bankman-Fried, primarily from Alameda.
As we spoke, Fried popped her head in the doorway. “Dinner at seven?” she
said. “How does pasta with vegetables sound?” Bankman-Fried, who barely
spoke to his parents while in my presence, nodded. Before we assembled at the
table, Bankman emerged with a bottle of California Cabernet.
Bankman-Fried gulped water and swiftly cleaned his plate before returning to
his research. But Bankman, wiry and sunny in demeanor, seemed to be trying to
convey a sense of normalcy. He is best known for work that jump-started two
significant public-interest campaigns. One exposed illegal tax shelters and
documented the aggressive marketing of those shelters to corporations by legal
and accounting firms. He went on to help write legislation to identify users of
the shelters, as a result of which around a billion dollars in unpaid taxes were
recouped by the government.The second campaign has been to make tax-
return filing easy and free. (California has adopted some of the reforms he
fought for.) “You know, tax sounds so dull, and I get it,” he said, “but it’s really
about who gets to own what, when the music stops. So, it’s really important for
social-justice purposes.”
His son, though ostensibly supportive of crypto regulation in the U.S., once
wrote to a reporter, in an exchange he believed to be off the record, “Fuck
regulators . . . they don’t protect customers at all.” Bankman, by contrast, has
fought in his career for more government scrutiny of financial transactions. As
his son’s business grew, Bankman said, he became interested in how crypto
could make money transfers cheaper for consumers, especially in the Global
South.
On an FTX podcast in August, 2022, three months before the implosion, he
reportedly said, “From the start, whenever I was useful, I’d lend a hand.” He was
often useful, it turned out. According to the bankruptcy estate’s lawsuit, he

described Alameda as “a family business” years before his son hired him full
time, and employed his connections and expertise to help Alameda and FTX
grow. He joined his son at meetings on Capitol Hill aimed at securing changes
to the policies that currently make it illegal to operate most crypto exchanges in
the U.S. But Bankman’s role in FTX’s charitable giving was what he preferred
to talk about with me.
“The company seemed to have such unlimited resources that you could really
think big and do great things,” he said. He directed money to a universal-basic-
income project in Chicago, and a program that brought mental-health services
into troubled homes in South Florida. According to the bankruptcy suit,
another favored charity was Stanford.The complaint alleges that he gave his
university five and a half million dollars of “FTX Group donations,” for his and
Fried’s private professional gain.The day after the suit against them was filed,
Stanford announced that it would return the money.
During my dinner with the family, Sandor, a docile German shepherd, lay
underfoot. Before FTX collapsed, the family rarely locked their front door at
night, Bankman said, but they were now getting threats, some of them
antisemitic. At first, they were advised to hire full-time guards. But, once they
calculated the yearly outlay, they decided to supplement their part-time security
with Sandor. He is trained to attack if given the correct set of orders, in
German. “The trainer came over and put on a bite suit,” Bankman told me. “He
said the words and the dog leaped through the air and tore the arm off.”
Bankman is, in addition to his other work, a part-time therapist. Especially
interested in anxiety, he has written on the intersection of law and psychology
and co-hosted, with Stanford students, a podcast on wellness and the legal
profession. He has deployed his psychological expertise at home, to try to keep
everyone calm, but the morning after our dinner, as he and I walked around
campus, his own anxiety was evident. When I asked what his son’s defense
would cost, Bankman said, “Substantially everything we have.” But, he added,
sounding melancholic, “that’s what money is for.”
N
“It’s like a relic from the Before Plantar Fasciitis Era.”
Cartoon by Emily Flake
ot long after Sam was born, it became clear to his parents that he was not
like other children. He cared little for toys, apart from puzzles, and
seemed largely indifferent to amusement parks and birthday parties. One
evening before bed, Fried recalled, Sam and Gabriel, who were still in
elementary school, started asking her and Bankman questions about divorce.
They knew a kid whose parents were getting one, and wanted to know how it
worked, and who got what. “We ended up, like, talking about community-
property states, and the alternatives to community-property states, and the
different ways of dividing up human capital,” Fried said.The discussion went
on for more than an hour, and after she and Bankman left the bedroom she
turned to him and said, “We are such idiots.They’re interested in what we’re
Open cartoon gallery

interested in, they’re just a lot younger and more ignorant.” Fried told me,
unable to conceal her pride, “And that changed child rearing for us.”They
would give their boys fewer amusement parks and more adult conversation.
Still, a few years later, she arrived home from work one day to find Sam, who
rarely cried, in tears. “I am so bored I feel like I’m going to die,” he told her. At
that point, Fried said, “we went into high gear.”They enrolled him in a
Saturday program called Math Circle, where professors taught logic and
problem-solving to precocious students.There were further elevated math
classes before school. And in ninth grade Bankman-Fried was admitted to a
selective summer program called Canada/USA Mathcamp, where, for the first
time, he made close friends. Gary Wang, who would become an FTX co-
founder, was one of them. “Sam just got inducted into this other world of math
and science nerds with passion, and they were his people,” Fried said.
Sam and Gabe were also encouraged to engage in discussions about human
rights and foreign policy at their parents’ Sunday-night dinners. Larry Kramer
recalled once having a disagreement with the boys and saying something
patronizing, like “When you get a little older, you’ll understand.” Later, Kramer
said, Bankman took him aside: “They wanted their kids to be treated at the
same level as the adults.”
After some hand-wringing about their commitment to public schooling, Fried
and Bankman decided that Sam and Gabe would go to high school at Crystal
Springs Uplands, a private school that attracted many privileged tech kids,
including Steve Jobs’s son. Sam was kind but mostly kept to himself, a former
student recalled: “Everyone recognized he was brilliant and super sharp and
that school wasn’t challenging for him.”
After graduating, Bankman-Fried enrolled at M.I.T., imagining that he might
become a physicist. His plans began to evolve in his sophomore year, when he
learned about the effective-altruism movement. Many effective altruists have
taken inspiration from the philosopher Peter Singer, who argues that, when
more than a billion people in the developing world are impoverished and
suffering, spending on luxuries is morally flawed.The E.A. movement has
considered how much money it would take to save a single imperilled life
(approximately four thousand dollars, by one estimate), and some of its
adherents have pursued high-paying careers in order to give most of their
earnings to organizations that serve vulnerable groups.The movement appeals
to people with quantitative orientations.
In 2014, degree in hand, Bankman-Fried took a job at Jane Street Capital, a
trading firm that used mathematical models to find and exploit price
discrepancies in different securities markets.The firm hired many programmers
and math majors and had a geeky, collegial culture; late-night chess
tournaments were common. Jane Street attracted other young effective altruists,
among them Caroline Ellison, the daughter of M.I.T. professors, who had
graduated from Stanford.
Bankman-Fried told me that the job favored people who could keep track of
the many variables influencing the market, and who had the ability to
synthesize them and make fast trading decisions, all while managing the
computer code designed to execute the trades. He described it as “sort of, like,
right at the borderline of humans and computers.”
Bankman-Fried told me that he gave away about half of what he made at Jane
Street, though he declined to reveal the amount. Much of the money, he said,
went to animal-welfare organizations and to the Centre for Effective Altruism,
for grants and movement-building. After about three years, he left Jane Street
and briefly worked for the Centre while thinking of starting a company of his
own.
The cryptocurrency boom was under way, and hundreds of digital coins were
trading on exchanges around the world. Bankman-Fried became interested in
the industry after noticing that the prices were often quoted differently
depending on which exchange one was using. A clever trader who was
proficient in algorithmic programming was well positioned to exploit the
differences—say, buying a bitcoin in the U.S., selling it in Japan, and profiting

U
on the spread. In 2017, according to court filings, he and a colleague,Tara Mac
Aulay, started trading crypto with their own money on various exchanges.
Eventually, others joined in—Ellison; Sam’s math-camp friend Wang, who’d
worked at Google; and Singh, a friend of Gabe’s who was working at Facebook.
Wang and Singh had also become effective altruists, pledging to donate most of
their earnings.The friends made the fund official, naming it Alameda Research.
nder Bankman-Fried, its first C.E.O., Alameda made aggressive bets,
often with borrowed money. Because traditional banks wouldn’t lend to
crypto companies, the fund had to turn to institutions that catered to crypto,
frequently at high interest rates. Alameda’s track record, according to the Wall
Street Journal, was inconsistent. A few months after launching, it lost about
two-thirds of its assets on a big bet on XRP, a digital currency issued by a
blockchain-based payments network. Mac Aulay quit, along with some other
employees. Last year, she wrote on Twitter that the departures were in part
caused by “concerns over risk management and business ethics.”
Bankman-Fried rebuilt the fund and moved it to Hong Kong. In 2019, though,
in the face of regulatory uncertainty, he turned to his dad, who advised his son
to set up shop in a place like the Bahamas, which was trying to generate
domestic investment by making itself a crypto hub. FTX launched there later
that year as an exchange and a trading platform. Alameda provided legitimacy
by trading heavily on the new platform—an arrangement that also created
conditions for Alameda to receive favorable treatment (possibly by being able to
see what trades others on the exchange were making).The C.F.T.C. alleges that
FTX gave the fund an “unfair advantage” by exempting it from rules that
applied to other users. Bankman-Fried contends that Alameda wasn’t granted
preferential access in any way that really mattered: “It didn’t give them the sort
of leniency that would fuck over other accounts. We were fairly careful about
that.”
In the penthouse, which was valued at more than thirty million dollars and
overlooked a yacht-choked marina, Bankman-Fried was living like a
fantastically privileged college student, sharing the vast space with Ellison,
Wang, Singh, and other employees. He kept odd hours, sometimes napping in a
beanbag chair at the office. In 2019, he tweeted about “stimulants when you
wake up, sleeping pills if you need them.”Two years later, Ellison tweeted,
“Nothing like regular amphetamine use to make you appreciate how dumb a lot
of normal, non-medicated human experience is.” (Bankman-Fried has said that
he took only prescribed medication, and that his use was on label; Ellison did
not comment for this story.)
Most of FTX’s revenue came through fees that investors paid to trade on its
platform. CNBC reported that the exchange’s revenue was a billion dollars in
2021.That fall, Bankman-Fried appointed Ellison and Sam Trabucco, a fellow
M.I.T. graduate, to become co-C.E.O.s of Alameda, so that he could focus on
FTX. Bankman-Fried has said that he didn’t play a role in investing decisions
for Alameda after that point, but, according to the C.F.T.C. lawsuit against
him, he maintained daily contact with Ellison and Trabucco and stayed
intimately involved with the fund.
Bankman-Fried was also becoming a kind of international statesman of crypto.
Zeke Faux, a Bloomberg reporter and the author of a book about the industry,
“Number Go Up,” told me, “His trick with the media was just being very
accessible. If a crypto newsletter needed a quote about Shiba Inu coin prices, he
was there. And on the way up this was really effective, and he was able to create
this image as the only honest guy in crypto.”
Bankman-Fried told me, of that time, “I was on the path to accomplishing
what I wanted to accomplish.” Further affirmation seemed to come when the
best-selling author Michael Lewis started hanging around the office and
accompanying him to meetings. Bankman-Fried gave Lewis unrestricted access
for a book that is set to be published next month.
While audited financial statements for 2021 show a profitable company, FTX,
apparently through a loophole in the tax code that applies to cryptocurrencies,
was able to report $3.7 billion in carryover losses on its tax returns, greatly

B
reducing its tax bill. Later, accounting experts would see some red flags in the
financial statements, including the fact that two different, relatively unknown
auditors had prepared them. As one expert speculated on CoinDesk, “With the
benefit of hindsight, we can see it perhaps suggested that Bankman-Fried didn’t
want any firm to see the whole picture.”
The following year, a murky FTX transaction implicated Bankman-Fried’s
parents directly. During the company’s property-buying frenzy, the couple
signed a deed to the sixteen-and-half-million-dollar beach house in the
Bahamas where they stayed, although they hadn’t paid anything toward it.The
bankruptcy suit insinuates that the arrangement was made at their son’s
instigation. Bankman-Fried and his parents strongly deny this.
In an explanation that reflects more carelessness about signing legal documents
than Stanford law professors typically possess, Bankman told The New Yorker
that he and his wife signed the deed in error; that the house was intended to be
company property; and that, after belatedly grasping the U.S. tax implications
of attesting to owning it, they fulfilled their legal obligations by alerting
company lawyers to their concerns. A spokesperson for the couple said,
“Outside counsel confirmed to Joe and Barbara that FTX would have all
beneficial ownership of the house and agreed to document that in writing.”
ankman-Fried’s ambitions for his philanthropy grew along with FTX.
After the covid-19 pandemic began, he joined multiple billionaires,
including Peter Thiel and Patrick Collison, in funnelling money into efforts to
find treatments. Edward Mills, a professor at McMaster University, whose lab
conducted one of the largest covid therapeutics trials in the world, was an
FTX beneficiary. He told me that Bankman-Fried wanted to provide funding
to hundreds of biotech companies to develop vaccines and treatments, which he
hoped could be rapidly tested through an international network of clinical-trial
sites. “Sam had a vision of a world free of disease.” Mills said.
F
At the same time, Bankman-Fried was also becoming one of the largest
political donors in Washington, personally contributing some forty million
dollars ahead of the 2022 midterms, according to OpenSecrets, a nonprofit that
tracks money in politics. He was one of the top C.E.O. donors to Joe Biden’s
2020 Presidential campaign, giving more than five million dollars (an “anti-
Trump” donation, he told me). He also made dark-money contributions to
Republicans, which he wouldn’t quantify. One of his goals was to counter
extremist candidates in Republican primaries, he said, and by keeping his
payments under the radar he could avoid the backlash that would ensue if
candidates were found to have taken money from a known Democratic donor.
By the end of 2022, however, he had no more money to give, and, of all the
causes he espoused, the effective-altruism movement in particular was reeling
from his downfall. Not long before Bankman-Fried’s arrest, one of the
movement’s co-founders, William MacAskill, wrote on Twitter, “If he lied and
misused customer funds he betrayed me, just as he betrayed his customers, his
employees, his investors, & the communities he was a part of.” Peter Singer told
me that although he thinks the movement will persist, Bankman-Fried’s arrest
has made the public more cynical about individuals trying to earn money to
give it away. And, in an online effective-altruism forum, community members
mourned the fact that FTX customers’ lives had been ruined while also berating
themselves for doing weak due diligence before, as one member put it,
“entrusting a decent chunk of the financing and reputation of the entire EA
movement to an offshore crypto business.”
or FTX, the end began in the spring of 2022, when, in the face of rising
interest rates, crypto darlings began to falter, sending waves of financial
stress through the industry. Bitcoin dropped by twenty-seven per cent in eight
days; terraUSD and Luna, two coins that provided liquidity to other crypto
firms, lost almost all their value; Celsius Network, a crypto exchange, collapsed;
and Three Arrows Capital, a ten-billion-dollar crypto hedge fund, was forced to
liquidate after heavy losses.That June, a psychiatrist who had treated

Bankman-Fried in California moved to the Bahamas to become a life coach for
his rattled staff.
Nonetheless, through the summer, Bankman-Fried seemed to signal that he
was unaffected by the turmoil in his industry, announcing plans to rescue some
of the crypto companies that hadn’t fared as well as FTX had. In late October,
he visited Saudi Arabia to try to interest new investors. On November 2nd, the
CoinDesk article about Alameda’s balance sheet came out.
The following Sunday, when C.Z., the Binance C.E.O., tweeted his doubts and
accelerated the rush of customer-withdrawal requests, Bankman-Fried’s parents
were in the Bahamas having an approximation of their Stanford Sunday-night
dinners with FTX employees. Mid-meal, a company lawyer took a call, became
agitated, and left.
“It was incredibly stressful and overwhelming,” Bankman-Fried told me of the
following days. He says he figured he could raise several billion dollars from
investors to tide the company over and fulfill withdrawal requests. He could
then sell off assets to raise more cash while keeping the exchange functioning.
“There were way too many things I needed to be doing,” he said. “It was kind of
scary.”
The day after C.Z. indicated that he was dumping his FTT, FTX
acknowledged that it was experiencing a liquidity crisis, and Bankman-Fried
started looking publicly for a bailout. Around that time, Bahamian police paid a
visit to the office.The visit was likely in regard to a security breach, but some
employees started to panic that they might be in trouble, and others grew angry.
“I think that, somehow, we all had this superhuman sense of him,” a former
employee told me. Now their leader was tainted, and so were their résumés.
Soon, the employee went on, several of them began taking turns staying with
Singh, a committed member of the E.A. community, out of concern that he
might be suicidal. (Singh’s attorney did not respond to requests for comment.)
Three months later, Singh pleaded guilty to wire fraud, conspiracy to commit
fraud, conspiracy to commit money laundering, and conspiracy to violate
I
campaign-finance laws.The recent suit against Bankman-Fried’s parents cited
an e-mail from Fried to her son suggesting that he use Singh’s name instead of
his own when making a one-million-dollar contribution to Mind the Gap, in
order to avoid creating “the impression that funding MTG is a family affair.”
Fried told The New Yorker that this was “a perfectly legal and commonplace
practice,” and said that her son had donated roughly a tenth of that figure to
her pac.
As FTX’s downward spiral continued, Bankman began speaking with defense
lawyers and tried to get his son to join the conversations. But, whether
determined or delusional, Bankman-Fried was solely focussed on persuading
people to entrust him with hundreds of millions more dollars, to save the
company. At times, according to Bloomberg, his father was beside him, making
calls on his behalf, to little avail. Many people were quitting, packing their
suitcases, and leaving the island, said the colleague who, a few weeks later,
would be taking Bankman-Fried’s class ring and wallet before officers placed
him in handcuffs: “At some point, Sam was practically the only one left.”
t’s well known that the government can exert enormous pressure on
coöperating witnesses, and Bankman-Fried’s parents recognize the
devastating role their son’s former colleagues and roommates are likely to play
in his trial. In addition to Ellison’s testimony, Wang, who pleaded guilty to four
fraud charges, is expected to say he helped create the computer-code back door
that allowed Alameda to borrow so much from FTX. Singh is also expected to
take the stand.

It is standard practice for banks to take depositors’ money and use it for other
activities. Bankman-Fried’s defense could try to argue that FTX customers
knew their money might be used by the company for other purposes. Another
defense argument is likely to be that FTX’s external legal counsel, the firm
Sullivan & Cromwell, and Ryne Miller, the general counsel of FTX.US, the
company’s American subsidiary, may have been motivated by conflicts of
interest. Miller was a former partner at Sullivan & Cromwell, a prominent firm
whose marquee client is Goldman Sachs. In 2021, Miller helped hire Sullivan
& Cromwell to serve as one of FTX’s outside legal advisers.
Bankman-Fried says that, in the days leading up to his decision to sign the
change-of-control agreement that allowed the company to file for bankruptcy,
Miller and Sullivan & Cromwell attorneys sent him numerous messages
pressuring him to do so—a campaign that Bankman-Fried describes as
“harassment, intimidation, coercion and misrepresentation.” His records show
that, on the night of November 8th, Miller sent a text to him and to FTX
leadership that said, “I need to wire SullCrom $4M to make sure we are all
represented through this. And we preserve any value that is left.Tomorrow.
From FTX.com cash. Who can do it? I’m in charge now.” Miller declined to
comment. Sullivan & Cromwell declined to comment on the record, but, in a
declaration filed with the bankruptcy court, Andrew Dietderich, a Sullivan &
Cromwell partner, said of Bankman-Fried’s account of being pressured to file
for Chapter 11, “This is false.”
Around four-thirty the next morning, an exhausted Bankman-Fried clicked the
DocuSign link Miller had sent him and electronically signed the document.
About ten minutes later, he says, an emergency-funding offer of about four
billion dollars came through from Tron, a blockchain platform.Tron’s founder,
Justin Sun, told Bloomberg TV that the offer was “subject to due diligence.”
Bankman-Fried said that he tried to rescind his signature but couldn’t.
“That is like a singular fixed moment around which everything else rotates,” the
former colleague said. “That was incredibly palpable. I saw a man who was
haunted by the fact that he could not wrap his mind around what had
happened. It’s like losing your keys and you’ve checked the room and you’ve
checked the sofa and you can’t figure out where they went.”
Around the same time, Miller and Sullivan & Cromwell went to federal
prosecutors, the Securities and Exchange Commission, and the C.F.T.C. to
report alleged accounting problems at FTX.US. And, after the law firm helped
choose John Ray to lead the company through bankruptcy, he hired it as the
lead legal adviser.The firm went on to bill more than a hundred million dollars
for the first several months of work for the bankruptcy, with hundreds of
millions more likely to come. (A Sullivan & Cromwell spokesperson directed
The New Yorker to an effusive June report by a fee examiner from Godfrey &
Kahn that acknowledged the “remarkable” fees but went on to praise the firm’s
“creativity, professionalism, and personal sacrifice” in “transforming a
smoldering heap of wreckage into a functioning Chapter 11.”) But last January
a trustee policing bankruptcies for conflicts of interest on behalf of the Justice
Department filed an objection to the firm’s appointment.
That objection was subsequently resolved, but Jonathan Lipson, a bankruptcy
expert at Temple University, later filed a brief in support of the trustee, noting
that, in January, Ray had referred to FTX as a “dumpster fire.” If that was true,
he wrote, it was worth questioning why Sullivan & Cromwell hadn’t seen it
burning sooner.
Even if the defense can prove that Sullivan & Cromwell behaved unethically,
few legal experts I spoke with think that the court will be persuaded by
Bankman-Fried’s contention that, if he’d had more time, FTX’s problems could
have been corrected. One expert in white-collar law likened it to taking a
hundred dollars from the collection plate at church and hoping to gamble with
it at the race track, win, and put a hundred and fifty dollars back onto the plate.
“It’s one thing to take your own money and bet on something you think is
going to be a winner,” he said. “But there’s no excuse for taking someone else’s
money.”
Intensifying the legal peril is Ray’s claim, from his first legal filing as head of
FTX, that he has never “seen such a complete failure of corporate controls and

O
such a complete absence of trustworthy financial information as occurred here.”
Testifying before Congress last December, he compared FTX executives’
conduct unfavorably to Enron’s. “Crimes that were committed there were
highly orchestrated financial machinations by highly sophisticated people to
keep transactions off balance sheets,” he said. “This is just taking money from
customers and using it for your own purpose.”
Bankman-Fried’s defense has argued that the government is effectively
deputizing the company to aid the prosecution.The defense has further
complained that Ray and his colleagues control FTX’s servers and files, and
that they have denied Bankman-Fried access to documents that might
exonerate him, including records of changes to the computer-code base that
show exactly who enabled Alameda to engage in unrestricted borrowing from
FTX. Ray declined to comment, and the prosecution denies that Bankman-
Fried’s access has been impeded.
n December 12th, a month after the Chapter 11 filing, Bankman-Fried
was in the penthouse drafting testimony about FTX’s collapse, which he
had promised to give the next day to the U.S. House Financial Services
Committee. Not long before Bahamian officials showed up to arrest him, he
had shared a Google doc of the testimony with his mom and his colleague, and
one of them struck out his opening line: “I would like to start by formally
stating, under oath: I fucked up.”
Financial-fraud cases of this magnitude often end with guilty pleas, so court
trials like Bankman-Fried’s are relatively rare. After years of sustaining harsh
criticism for the lack of prosecutions related to the 2008 financial crisis, and for
doing little as crypto grew into a speculative bubble, the Justice Department
and securities regulators seem to be using the FTX case as an opportunity to
project a newfound toughness on financial crime.
Bankman-Fried is already facing consequences for trying to improve his public
image in advance of the trial.This summer, the Times published portions of a
diary kept by Ellison, in which she worried about being in over her head.
Bankman-Fried’s legal team admitted in a court filing that he had provided
materials to the Times.The lead prosecutor, Danielle Sassoon, said that the leak
was an attempt by Bankman-Fried to intimidate a witness, and not his first.
She filed a motion asking that he and his parents be barred from making public
statements about his case, and that he be transferred from house arrest to jail.
Bankman-Fried’s defense lawyer Mark Cohen, of Cohen & Gresser, argued
that Bankman-Fried had First and Sixth Amendment rights to respond to
media inquiries about his case, and that his imprisonment would hamper his
ability to prepare for his trial. But Judge Lewis A. Kaplan, who is presiding over
the case, agreed in July to the gag order, and in August he remanded Bankman-
Fried to the Metropolitan Detention Center in Brooklyn, to await the start of
his trial. My conversations with Bankman-Fried thus came to a halt.
Last December, around the time of the arrest, his parents wrote him a letter.
“You are innocent,” they said, and reassured him, “By a year from now, there is a
nontrivial chance that the world’s fury may shift to some other villain.”Ten
months in, his parents’ very cautious optimism seems wishful. A fourth top
executive in Bankman-Fried’s inner circle, Ryan Salame, took a plea deal in
September.
In an e-mail to The New Yorker, Fried characterized the actions of both the
prosecution and the bankruptcy estate as “McCarthyite” and a “relentless
pursuit of total destruction,” which is enabled by “a credulous public that will
believe anything they say.” She went on, “It takes a lifetime to build up a
reputation as honorable people. It takes five minutes to destroy it, which they
now have done.”
As their son’s October trial date nears, Fried and Bankman have started talking
about how, should he lose, they might handle his appeal.They take turns flying
from California to visit him at the Brooklyn jail every Tuesday. But at Stanford
they determinedly continue their famous Sunday-night dinners—staying “in

the game,” their colleague Robert Gordon said, “even as their lives are
collapsing around them.” ♦
An earlier version of this article misstated the amount of Tron’s funding offer, the
outcome of the U.S. trustee’s motion, and the chronology of pandemic restrictions in
Hong Kong.
Published in the print edition of the October 2, 2023, issue.
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Sheelah Kolhatkar is a staff writer at The New Yorker, where she writes about Wall
Street, Silicon Valley, economics, and politics. She is the author of “Black Edge: Inside
Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on
Wall Street.”
How FTX’s Y
oung Executives Shattered Their Parents
As their children are sentenced for fraud, the parents of FTX’
s top leaders have described
their disbelief at how the crypto exchange upended their lives.
Listen to this article · 8:24 min Learn more
By David Yaffe-Bellany
David Yaffe-Bellany covers the cryptocurrency industry.
Oct. 30, 2024
The week that FTX collapsed in 2022, the father of Nishad Singh, one of the crypto
exchange’s top executives, arrived at the airport to pick him up.
His son, who had just turned 27, appeared suicidal. “Nishad was a shell of himself,
completely destroyed by his guilt,
” Gururaj Singh, a veteran tech executive, recalled in a
recent court filing.
For the next five months, the elder Mr
. Singh, now 63, put his career on hold to focus on
his son’s mental health. “Every minute I was not next to him, I worried that I would be
told by someone that he had just ended his life,
” he wrote.
He also had to come to terms with an alarming fact: His son, a talented software engineer
who had graduated with the highest honors from the University of California, Berkeley
,
was a criminal. Nishad Singh had helped oversee a sweeping conspiracy that erased $8
billion from FTX’s books, plunging the company into bankruptcy
, draining customers’
savings and prompting a slew of criminal investigations centered on Sam Bankman-
Fried, the founder of FTX.
The younger Mr
. Singh pleaded guilty to fraud last year
. In court on Wednesday
, a judge
sentenced him to three years of supervised release, sparing him prison time for his role in
FTX’s implosion as he became the third of the company’s top leaders to receive a
punishment.
Sign up for the On Tech newsletter
. Get our best tech reporting from
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https://www.nytimes.com/2024/10/30/technology/ftx-executives-
parents.html
14.03.2025, 10:07 How FTX’s Young Executives Shattered Their Parents - The New York Times
https://www.nytimes.com/2024/10/30/technology/ftx-executives-parents.html 1/6

Each of those cases has illustrated an emotional subplot of the FTX drama: the plight of
the conspirators’ parents, a group of wealthy academics and high-achieving immigrants
who were heavily involved in their adult children’s lives. Before the crypto exchange
failed, they had all lived versions of the upper-middle-class dream, raising children who
coasted from selective schools into high-paying jobs. Now they are consumed by sadness
and disbelief, struggling to understand how such a fate could have befallen families like
theirs.
“His life is now altered in a way none of us could ever have imagined,
” Anu Singh, a
psychologist and the mother of Nishad Singh, lamented in a recent filing. The mother of
Caroline Ellison, another executive at the crypto business, said she had a hard time
reconciling what her daughter had done.
Nishad Singh, whose father put his career on hold to focus on his son’s mental health, is set
to be sentenced on Wednesday after pleading guilty to fraud. Jefferson Siegel for The New York
Times
“I will spend the rest of my life trying to understand how someone as good and selfless in
so much of her life could end up in the situation she did,
” Sara Fisher Ellison wrote in a
filing last month.
Many white-collar defendants are middle-aged executives, with spouses and children of
their own. But the conspirators in the FTX case were unusually young — in their mid- or
late 20s when they committed their crimes.
Their parents’ lives have been shattered. Some of them faced enormous legal bills or
suffered reputational damage. Mr
. Bankman-Fried’s parents, the Stanford University law
professors Joe Bankman and Barbara Fried, were sued by FTX’s bankruptcy estate over
their financial entanglements with the company
. Ms. Ellison’s parents, who both teach
economics at the Massachusetts Institute of Technology
, were harassed online and
hounded by the news media.
Over the past nine months, the parents of Mr
. Bankman-Fried, Ms. Ellison and Mr
. Singh
have written letters to Lewis A. Kaplan, the judge overseeing the FTX case, pleading for
leniency for their children. They described the emotional toll of FTX’s collapse,
recounting wrenching conversations and endless stress. Ms. Fried said seeing her son in
jail had plunged her into indescribable grief.
“I would gladly change places with him if I could,
” she wrote.
Mr
. Bankman-Fried was sentenced to 25 years in prison in March, and Ms. Ellison
received a two-year sentence at a hearing last month. One other member of Mr
.
Bankman-Fried’s inner circle, the FTX co-founder Gary Wang, is scheduled to learn his
fate on Nov
. 20, with letters from family due about two weeks before his sentencing.
(A fifth FTX executive, Ryan Salame, was recently sentenced to seven and a half years in
prison, but his charges weren’t related to the conspiracy that caused the company to
implode.)
Across those cases, the FTX conspirators benefited from privileges that most criminal
defendants lack, said Seth Goertz, a former federal prosecutor in Arizona. They hired top-
tier law firms to mount sophisticated defenses featuring sympathetic portraits of their
lives, anchored by polished parental testimonies.
“You’re certainly seeing class dynamics in play here,
” Mr
. Goertz said. “This is not
something a defendant who just has access to a public defender could do.
”
The parents of Mr
. Bankman-Fried, Ms. Ellison and Mr
. Singh declined to comment.
Mr
. Bankman-Fried started working with Ms. Ellison, Mr
. Singh and Mr
. Wang in 2018,
when he ran a crypto hedge fund, Alameda Research, in Berkeley
, Calif. All recent college
graduates, they bonded over a shared commitment to effective altruism — a
philanthropic movement that calls on young people to donate most of their money to
charity
.

Ms. Ellison’s parents were skeptical of her life decisions. She ignored the “standard
parental advice” to buy a house and avoid storing all her savings on FTX, her father
,
Glenn Ellison, wrote to the court.
“I was a bit shocked when the first tax receipt for a charitable contribution a hundred
times larger than I would have thought a college student should make arrived in the
mail,
” Mr
. Ellison wrote in a filing last month.
The elder Mr
. Singh had his own doubts about the new crypto venture. His son had quit a
job at Facebook to join Alameda, a move that struck him as unwise. But when he toured
Alameda’s office, he was impressed.
“If I was Nishad’s age, I could see being drawn to work there,
” he wrote in a filing. “I
spoke to Sam for a few minutes and found him to be very bright.
”
Mr
. Bankman-Fried, Mr
. Singh, Mr
. Wang and Ms. Ellison eventually moved to Hong
Kong, where they started FTX. The company became a global phenomenon, turning its
top executives into billionaires, at least on paper
.
Mr
. Bankman-Fried’s parents were intimately involved in the business. Mr
. Bankman
helped FTX find its first lawyers and worked on the company’s advocacy efforts in
Washington. Ms. Fried, who ran a political donor network in Silicon Valley
, advised Mr
.
Bankman-Fried and Mr
. Singh on campaign contributions before the 2022 midterm
elections, court filings show.
Other FTX parents played smaller roles, offering informal guidance and occasionally
visiting the Bahamas, where the company relocated in 2021.
At times, they were completely in the dark about their children’s company
. In his letter to
the court, Mr
. Ellison said he had no idea his daughter had been dating Mr
. Bankman-
Fried, with whom she had a turbulent, multiyear relationship, until a few months before
they broke up.
“I wish I could offer some insight into how things went so wrong and how she ended up
making the decisions she did,
” Mr
. Ellison wrote. “But we, like many others, were
completely blindsided.
”
Caroline Ellison, a former top executive in Mr
. Bankman-Fried’s empire, received a two-year
sentence. Her father said some of her decisions had “completely blindsided” him. Jefferson
Siegel for The New York Times
When FTX unraveled in late 2022, all three sets of parents sprang into action. Mr
.
Bankman and Ms. Fried traveled to the Bahamas, where they stayed with their son for a
month.
Mr
. Ellison and Ms. Fisher Ellison struggled to reach their daughter
. When they finally
spoke the day after FTX’s bankruptcy
, Ms. Ellison “was in a state I have never seen,
” Mr
.
Ellison wrote. “She just could not stop crying, saying multiple times that she ‘knew.
’”
The elder Mr
. Singh had been bracing for bad news. A few days before the bankruptcy
, he
had gotten a panicked call from his son. “Can you come here?” Nishad Singh had asked.
“I’m scared. I need you.
”
But FTX unraveled too quickly for him to intervene, so he arranged for his son to fly
home to the San Francisco Bay Area with his fiancée, who was also an FTX employee,
and their dog, Gopher
.
At home, the elder Mr
. Singh tried to hold himself together
, to stay strong for his family
.
When Ms. Singh saw their son, she pulled him into an embrace. “I held him as tightly as I
could, rocking him back and forth as he wept,
” she wrote.
Over the next year
, Gururaj Singh traveled to New York with his son for meetings with
prosecutors. All the onetime billionaire wants now is to live a simple and happy life, he
told the judge. “To him, this means a renewed focus on family
,
” the elder Mr
. Singh wrote.
“On getting married, becoming a father one day
.
”

Kitty Bennett contributed research.
David Yaffe-Bellany writes about the crypto industry from San Francisco. He can be reached at
davidyb@nytimes.com. More about David Yaffe-Bellany
A version of this article appears in print on , Section B, Page 1 of the New York edition with the headline: As FTX Fell, It Also Hurt
The Parents
TECH
Sam Bankman-Fried's parents are embroiled in the
crypto exchange's troubles. Here's what we know
about the Stanford Law professors.
Grace Dean and Huileng Tan Updated Sep 22, 2023, 6:46 AM GMT+1
Tom Williams/CQ-Roll Call, Inc via Getty Images; Michael M. Santiago/Getty Images
Barbara Fried and Joseph Bankman are the parents of FTX
cofounder Sam Bankman-Fried.
Fried and Bankman, who stuck close by their son's side through
the fallout from FTX's collapse, are now being sued by FTX.
Here's what we know about them.
FTX has sued Sam Bankman-Fried's
parents, seeking to recover millions
14.03.2025, 10:06 Who Are Sam Bankman-Fried's Parents and What Do They Do? - Business Insider
https://www.businessinsider.com/sam-bankman-fried-sbf-who-are-his-parents-barbara-joseph-2022-12#ftx-has-sued-sam-bankman-frieds-parent… 1/12

Barbara Fried and Joseph Bankman. Michael M. Santiago/Getty Images
FTX co-founder Sam Bankman-Fried has been embroiled in legal
troubles since the collapse of the cryptocurrency exchange in
November.
The 31-year-old faces seven charges of fraud and conspiracy relating to
the exchange's collapse and is in jail. His trial on federal fraud charges is
scheduled to begin on October 3.
Now, Bankman-Friend's parents — longtime Stanford law professors
Joseph Bankman and Barbara Fried — are caught up in FTX's troubles
too.
On September 18, FTX Trading filed a lawsuit against Bankman and
Fried accusing them of using their influence to "siphon" millions of
dollars from the company for their own personal benefit and "their
chosen pet causes."
FTX alleged, among other things, that Bankman and Fried had accepted
the transfer of a $10 million cash gift and a $16.4 million luxury property
in The Bahamas to them — even when they knew the exchange was on
the brink of collapse.
"Despite presenting itself to investors and the public as a sophisticated
group of cryptocurrency exchanges and businesses, the FTX Group was
a self-described 'family business,'" the lawsuit claims.
The complaint filed in the collapsed cryptocurrency exchange's
bankruptcy case in Delaware seeks to recover some damages from
Bankman and Fried.
A representative for Bankman-Fried declined to comment to Insider.
Legal representatives for Bankman and Fried did not immediately to a
request for comment from Insider sent outside regular business hours.
Attorneys for Bankman and Fried told the Associated Press in a
Wednesday statement that the lawsuit is a "dangerous attempt to
intimidate Joe and Barbara and undermine the jury process just days
before their child's trial begins."
They added that the claims in the lawsuit are "completely false."
Bankman-Fried, the disgraced cofounder
and former CEO of collapsed crypto
exchange FTX, is in jail

Reuters
Bankman-Fried, who faces multiple fraud charges tied to the
spectacular collapse of FTX, is now in a Brooklyn jail known for its poor
conditions.
Bankman-Fried has been held in the Metropolitan Detention Center for
more than a month after US District Judge Lewis Kaplan revoked his
bail on August 11.
The former crypto mogul was previously on house arrest after posting a
$250 million bail on December 22, shortly after he landed in the US after
being extradited from the Bahamas.
As part of his bail terms, Bankman-Fried, who also cofounded crypto
trading firm Alameda Research, was required to stay at his parents'
home while he awaits trial.
His parents live in a multimillion-dollar home in Stanford, in the San
Francisco Bay Area, according to state records and news reports.
Zillow estimated the value of the five-bedroom home at about $4
million, while Redfin's estimate was $3.1 million as of January.
Bankman-Fried's parents have stuck close
by their son since he was arrested in the
Bahamas.
Tom Williams/Getty Images
Bankman-Fried was arrested in the Bahamas on December 12, and said
he was staying in a complex with his parents at the time. The next day,
his parents attended his court hearing in Nassau, the capital of the
Bahamas, where he was denied bail. They later visited the prison where
their son was being held.

In December, The Wall Street Journal reported the couple as telling
friends that they expected their son's legal bills to wipe them out
financially.
Bankman-Fried — who was — also appeared beaten down after his
arrest.
"I'm broke and wearing an ankle monitor and one of the most hated
people in the world," Bankman-Fried wrote in an unpublished draft of a
Twitter thread written after his arrest late last year, the New York Times
reported on September 19.
"There will probably never be anything I can do to make my lifetime
impact net positive," added Bankman-Fried in the published draft of a
Twitter thread.
Puck reporter Teddy Schleifer, who visited Bankman-Fried in January
while he was under house arrest, said that his parents were some of the
only people he still spoke to. Bankman-Fried told Schleifer that he
hadn't spoken to former Alameda CEO Caroline Ellison, former FTX
director of engineering Nishad Singh, or former FTX CTO Gary Wang
since mid-November.
"A lot of the people who I was closest to were my colleagues," Bankman-
Fried said when asked whether he still had any childhood friends living
nearby. "Most of the people who I was friends with are not talking to
me."
"For a number of years, I was incredibly lucky and fortunate in terms of
a lot of the relationships and support that I had," Bankman-Fried
continued. "Now there's basically nothing left."
Schleifer reported that Bankman-Fried spent his days playing video
games, scrolling Twitter, writing pages of recollections about his last
days at FTX, and "doing a hell of a lot of ruminating and antsy pottering"
around his parents' home. Bankman and Fried also bought their son a
German shepherd called Sandor, Schleifer reported.
So what do we know about Joseph
Bankman?
Joseph Bankman, father of former FTX CEO Sam Bankman-Fried, leaves after a bail hearing for his
son at Manhattan Federal Court on August 11, 2023 in New York City. Michael M. Santiago/Getty
Images
Bankman helped FTX recruit its first lawyers, joined FTX executives in
meetings on Capitol Hill, and advised his son as he prepared to testify
before the House Financial Services Committee, The New York Times
reported in December. Bankman regularly flew to the Bahamas, per The
Times.

The Times also reported that Bankman organized an FTX event at
Miami Heat's FTX Arena in March 2022, where local high school
students pitched business ideas to a panel of judges.
A spokesperson for Bankman told The Wall Street Journal in December
that Bankman was a paid FTX employee for 11 months, during which he
worked on charitable projects, and was not involved in running the
company.
On September 14, Bloomberg reported that Bankman helped to develop
marketing materials for FTX's inhouse cryptocurrency, and was a key
legal advisor.
FTX alleged in its September 18 lawsuit against Bankman and Fried, that
the latter he had complained about his $200,000 salary, according to an
exchange between Bankman-Fried and his father in January 2022.
Bankman had emailed FTX's head of administration that he should've
been getting $1 million a year instead, the lawsuit alleged. He then
brought the complaint to Bankman-Fried's attention and looped in
Fried on the issue.
FTX's lawyers then wrote that: "In other words, Bankman lobbied his
son to massively increase his own salary."
Bankman-Fried then gifted his parents $10 million in funds from
Alameda and the $16.4 million property in Bahamas within two weeks of
his father's complaint about his salary, the lawsuit alleged.
The lawsuit also alleged Bankman donated $5.5 million to Stanford
University to "curry favor with and enrich his employer at the FTX
Group's expense."
What about Barbara Fried?
Michael M. Santiago / Staff/ Getty Images
Barbara Fried worked as a professor of law at Stanford until she retired
from teaching in September 2022. Her scholarly interests were "at the
intersection of law, economics, and philosophy," according to her
biography on the university's website.
The New York Times reported in December that Fried and her husband
were popular faculty members at Stanford and regularly hosted dinners
for colleagues.
Fried writes short stories and poems. She also penned a biography of the
economist and lawyer Robert Hale and worked as a review editor for the
journal Philosophy & Public Affairs.
Fried graduated from Harvard University in 1983, per her Stanford
biography. Her first job after graduating was as a law clerk to US circuit

judge J. Edward Lumbard of the Court of Appeals. She went on to
practice as an associate at Paul, Weiss, Rifkind, Wharton & Garrison.
Fried joined Stanford as an assistant professor in 1987 and went on to
win multiple awards for excellence in teaching. She also had stints as a
visiting professor at New York University Law School, her biography
says.
Fried cofounded Mind the Gap, a Democratic super-PAC, from which
she resigned in November 2022, The Times reported.
Bankman-Fried's parents may have helped
shape his interest in effective altruism.
Photo by Alex Wong/Getty Images
https://www.businessinsider.com/sam-bankman-fried-sbf-who-are-his-parents-barbara-joseph-2022-12#ftx-has-sued-sam-bankman-frieds-pare… 10/12
Prior to FTX's collapse, Bankman-Fried was a poster boy for effective
altruism, a movement in which followers commit to doing the most
good for the largest number of people using science, evidence, and
reason.
Will MacAskill, an academic at Oxford University and a central force
behind effective altruism, is said to have introduced Bankman-Fried to
the movement. However, Bankman-Fried's parents appear to have had
some hand in shaping his philosophical outlook.
An article published on the website of Sequoia Capital, the venture
capital firm, said Bankman and Fried raised their son on utilitarian
beliefs, including family discussions about how to do the greatest good
for the largest number of people.
Both have an academic interest in corporate ethics, and his mother has
written a review of a book by Peter Singer, the philosopher seen by many
as the originator of the effective altruism movement.
Bankman-Fried has praised his parents for
the support he's received since FTX
collapsed.

Sam Bankman-Fried
Sam Bankman-Fried is escorted out of a Bahamas court on Wednesday. REUTERS/Marco Bello
Bankman-Fried said at The New York Times DealBook Summit that his
parents "bore no responsibility" for FTX's downfall.
"Anyone close to me, including my parents and employees and
coworkers, who fought with the company to push forward, they were
hurt by this," he said."I feel really grateful for the support my parents are
still giving me throughout all of this."
September 22: This story has been updated throughout with new
developments.
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It's not just FTX's Sam Bankman-Fried. His parents also face
legal trouble
OCTOBER 2, 2023 · 5:00 AM ET
By David Gura
3-Minute Listen PLAYLIST
Sam Bankman-Fried's parents face legal trouble of their own as FTX looks to claw back millions of dollars in
compensation and benefits from the couple.
Michael M. Santiago/Getty Images; Drew Angerer/Getty Images; David Dee Delgado/Getty Images
As disgraced FTX founder Sam Bankman-Fried gears up for the start of his trial
on Tuesday, two people close to him are now facing legal trouble of their own: his
parents.
For almost a year, Bankman-Fried's mom and dad, both of whom are well-
respected professors at Stanford Law School, have accompanied their son to
pretrial proceedings at a courthouse in Manhattan.
NPR 24 Hour Program Stream
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14.03.2025, 10:05 It's not just Sam Bankman-Fried. His parents also face legal trouble : NPR
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But now Barbara Fried and Joseph Bankman are being sued by FTX, which filed
for bankruptcy late last year.
Lawyers are trying to claw back millions of dollars from them — in cash and gifts,
including a $16.4 million villa in The Bahamas, where FTX was headquartered
before filing for bankruptcy late last year.
The civil suit against Sam Bankman-Fried's parents alleges they helped run their
son's crypto empire, and that for their work — some official, some unofficial —
they were handsomely rewarded.
"Bankman and Fried wielded their influence and status as Bankman-Fried's
parents to enrich themselves at the expense of the FTX Group," the plaintiffs said.
BUSINESS
Former FTX CEO Sam Bankman-Fried ordered to jail after judge revokes
his bail
BUSINESS
5 major revelations about the collapse of crypto giant FTX
FTX Founder Sam Bankman-Fried arrives at Manhattan Federal Court in New York City for a court appearance on
March 30, 2023. SBF is set to start his blockbuster trial on Tuesday.
Michael M. Santiago/Getty Images
Having spent more than three decades on the Stanford faculty, Bankman and
Fried have become institutions in their own right — important figures and beloved
members of a close-knit community. They have won numerous awards for their
scholarship and teaching, and many of their colleagues consider them close
friends.
After FTX filed its lawsuit, NPR reached out to every professor at Stanford Law
School for comment, and fewer than a dozen replied.
In an email, Robert Gordon, who has known the couple since the 1980s, said,
"Anyone who knows Barbara Fried and Joe Bankman well will believe it absurd to
think that they were engaged in self-dealing — since for many years they have
given generously of their time and money to good causes."
Here's a closer look at Sam Bankman-Fried's parents.
Who is Joseph Bankman?

Joseph Bankman and Barbara Fried have taught at Stanford Law School since the
late 1980s.
Bankman is, according to his official biography, "a leading scholar in United States
tax policy," and at Stanford, he "teaches mental health law and writes on the
intersection of law and psychology."
He is also a practicing therapist, who received a doctorate in psychology late in
his career. He continues to have an affiliation with a practice called the Pacific
Anxiety Group in Northern California, which says Bankman specializes "in the
treatment of anxiety, depression, and adjustments in both teens and adults."
"I never intended to quit my day job," he told the Stanford Lawyer, a magazine for
Stanford Law School alumni, in 2015. "But my scholarship and policy were
venturing into behavioral psychology and the law, and I wanted to understand
more about human behavior."
Joseph Bankman, father of former FTX CEO Sam Bankman-Fried, leaves after a bail hearing for his son at
Manhattan Federal Court in New York City on Aug. 11, 2023. Bankman has taught at Stanford Law School for
decades and has also worked as a therapist.
For years, Sam Bankman-Fried's father hosted a talk show on SiriusXM called
"Stanford Legal" with his colleague Pam Karlan, who was his classmate at Yale
Law School.
Bankman was a guest on NPR's Planet Money in 2017, and he came across as
quick-witted and incredibly passionate about tax reform. During the interview,
Bankman cracked a joke about his clothes. He pointed out his pants were stained,
and his cuffs were frayed.
"I really love explaining things," he told Stanford Law School graduates in a 2008
speech, after he received the John Bingham Hurlbut Award for Excellence in
Teaching — an honor Fried has won several times. "I love taking something opaque
and make it seem a little less opaque."
What about Barbara Fried?
Sam Bankman-Fried's mother is an eminent academic in her own right.

Barbara Fried, who decided to retire from teaching during FTX's heyday, is widely
known for her work on legal ethics.
She was an undergrad and graduate student at Harvard University in the 1970s
and 1980s, when influential philosophers John Rawls and Robert Nozick were on
the faculty, and throughout her career, Fried has grappled with their ideas about
free will.
She has also written about how society treats criminals. In an article titled
"Beyond Blame," which was published in 2013, she argued everybody is ultimately
compromised.
"The reality is that we are all at best compromised agents, whether by biology,
social circumstance, or brute luck," Fried wrote in the Boston Review. "Tellingly,
the more information people have about the context of the crime, the person who
committed it, and the circumstances he or she came from, the more nuanced are
their views of moral responsibility."
Barbara Fried, mother of former FTX CEO Sam Bankman-Fried, leaves after a bail hearing for her son at
Manhattan Federal Court in New York City on Aug. 11, 2023. Fried is an eminent academic widely known for her
work on legal ethics.
In recent years, as Joseph Bankman branched into psychotherapy as a sort of
second career, Fried turned to writing poetry and short stories.
"One unanticipated joy of writing fiction has been the opportunity it has offered
me to escape from myself, and reimagine the world through the lives and eyes of
others," she notes on her personal website.
Politics became another passion project, and in recent years, she co-founded a
nonprofit organization called Mind the Gap, which was described in a Vox article
as "a secretive group led by Stanford University academics" that "has unleashed
millions of dollars in political spending from Silicon Valley."
What was Joseph Bankman's alleged involvement in FTX?
Joseph Bankman's and Barbara Fried's lives took another turn as FTX grew into a
multi-billion dollar company, according to the lawsuit.

FTX's lawyers said Bankman was "a de facto officer, director, and/or manager" in
Bankman-Fried's crypto empire before he joined it in an official capacity as a
senior advisor to the FTX Foundation, its philanthropic arm.
In a 2022 interview with The FTX Podcast, a show FTX produced and has since
deleted from YouTube, Bankman said his son had asked him for years to join his
crypto empire.
"The company didn't have any lawyers," he said, of FTX's early days. "So, I think
my utility there was pretty obvious."
"As early as 2018," plaintiffs said, Bankman began offering strategic advice — not
only to his son, but to other executives. Bankman helped with hiring decisions. He
vetted outside counsel. And he made decisions about where FTX should spend
substantial amounts of money.
In 2021, Bankman went on leave from teaching at Stanford Law School to focus on
FTX full time.
In that paid role, Bankman decided where and how FTX made charitable
contributions. According to the lawsuit, on several occasions, he funneled money
to Stanford University, where he worked. Those donations totaled more than $5.5
million.
In a statement, a spokesperson for Stanford University said the school plans to
return those contributions "in their entirety."
"Bankman portrayed himself as the proverbial adult in the room — and was
uniquely positioned to fulfill that role," FTX's lawyers said. "Bankman was virtually
the only grow-up in the room, guiding the FTX Group and other executives, many
of whom were recent college graduates in their mid-20s and had never before run
a company, let alone managed billions of dollars."
What about Barbara Fried's involvement?
In their lawsuit, FTX's lawyers stress Barbara Fried "never had a formal position at
the FTX Group," unlike Joseph Bankman. But she was, they note, "the single most
influential advisor regarding Bankman-Fried's and the FTX Group's political
contributions."
Ahead of the 2022 midterm elections, Bankman-Fried personally donated around
$40 million to political candidates, committees, campaigns and causes, which
made him one of the most powerful donors in the United States.
"We're ambitious and looking to make a splash," Bankman-Fried's brother, Gabe,
told NBC News at the time.
Since then, federal prosecutors have alleged Bankman-Fried violated campaign
finance laws, using straw donors — other individuals — to make some of his
political contributions.
Citing correspondence between Bankman-Fried and his mother, FTX's lawyers
allege Fried encouraged her son to disguise donations to Mind the Gap, the
political nonprofit she co-founded.
What kind of rewards did they allegedly reap?
Joseph Bankman and Barbara Fried live in what has been widely described as a
modest house on the Stanford University campus, but their lives changed as FTX
grew, along with their son's wealth, according to FTX's lawyers.
YOUR MONEY
FTX investors fear they lost everything, and wonder if there's anything
they can do
PLANET MONEY
Sam Bankman-Fried and the spectacular fall of his crypto empire, FTX

The plaintiffs allege the company effectively bought them a $16.4 million house in
The Bahamas. After Bankman expressed dissatisfaction with his $200,000 FTX
salary, his son wired a $10 million cash gift to his parents, which FTX lawyers say
came from Alameda Research, a crypto hedge fund Bankman-Fried founded.
According to the lawsuit, Bankman-Fried made it seem like he was borrowing
money from Alameda. But according to the plaintiffs, "There is no indication that
Bankman-Fried intended to repay the so-called loan." Bankman allegedly moved
almost $7 million from his account in part of FTX's businesses into bank accounts
he shared with Fried.
"We are so touched by this gift," Bankman wrote his son, in an e-mail message
quoted in the lawsuit. "Mom is announcing retirement, which she would not have
done otherwise."
FTX allegedly paid for the decoration and upkeep of the home in The Bahamas
and according to the lawsuit, Bankman allegedly flew on privately-chartered jets,
"expensed $1,200 per night hotel stays to the FTX Group, and even appeared in a
Super Bowl commercial with Seinfeld writer Larry David months before the FTX
Group imploded."
YouTube
FTX Super Bowl Don't miss out with Larry David
FTX Super Bowl Don't miss out with Larry David
What has their response been to this lawsuit?
Joseph Bankman and Barbara Fried have retained separate lawyers, but in a joint
statement, their attorneys push back against what FTX's lawyers allege, calling
their claims "completely false."
Since their son was arrested in January, Bankman and Fried have kept a low
public profile. Fried now has emerita status at Stanford Law School; she has
stepped back from teaching. Bankman is on leave. A Stanford spokesperson said
they both remain on the faculty.
Michael Klausner, who was Bankman's classmate at Yale Law School, and is now a
colleague at Stanford, said he regularly sees Bankman on campus. They continue
to have friends over for dinner despite what has happened over the last year.

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"It hasn't led them to isolate themselves socially," Klausner said. "I see Joe often at
the law school."
Klausner expressed sympathy for Sam Bankman-Fried, recalling first meeting the
FTX founder as a six-year old.
"I hope Sam gets a fair hearing," he said, noting the case against Bankman-Fried
has been a subject of conversation among him and his colleagues. "I think many of
us disagree with the way the case has been handled from the moment of the
prosecution on."
Fried told The New Yorker, the only media outlet to whom she has spoken since
Bankman-Fried's arrest that "saving Sam is the major project of our lives."
But as she and Bankman prepare for the start of Bankman-Fried's criminal trial
this week, they will now have to focus on their own defense, as well.
stanford university bitcoin crypto ftx sam bankman-fried sbf joseph bankman barbara fried
FTX’s former CEO and founder Sam Bankman-Fried’s mother, Barbara Fried (R), and his father,
FTX’s former CEO and founder Sam Bankman-Fried’s mother, Barbara Fried (R), and his father,
Joseph Bankman, leave Manhattan Federal Court after his sentencing at Manhattan Federal Court in
Joseph Bankman, leave Manhattan Federal Court after his sentencing at Manhattan Federal Court in
New York City on March 28, 2024. Disgraced cryptocurrency wunderkind Sam Bankman-Fried was
New York City on March 28, 2024. Disgraced cryptocurrency wunderkind Sam Bankman-Fried was
sentenced to 25 years in jail on Thursday following his conviction in one of the biggest financial fraud
sentenced to 25 years in jail on Thursday following his conviction in one of the biggest financial fraud
cases in history. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via
cases in history. (Photo by TIMOTHY A. CLARY / AFP) (Photo by TIMOTHY A. CLARY/AFP via
Getty Images)
Getty Images)
NEWS
NEWS 
 CRIME AND PUBLIC SAFETY
CRIME AND PUBLIC SAFETY
Sam Bankman-Fried’s parents
Sam Bankman-Fried’s parents
‘heartbroken’ for ’empathetic’ son
‘heartbroken’ for ’empathetic’ son
who wanted to ‘do good on a large
who wanted to ‘do good on a large
scale’
scale’
Before sentencing Bankman-Fried to 25 years in prison,
Before sentencing Bankman-Fried to 25 years in prison,
a federal judge delivered a stinging rebuke of the
a federal judge delivered a stinging rebuke of the
disgraced cryptocurrency mogul that is at odds with the
disgraced cryptocurrency mogul that is at odds with the
sympathetic portrait offered by his Stanford Law school
sympathetic portrait offered by his Stanford Law school
parents
parents
•
• News
News
14.03.2025, 10:04 Sam Bankman-Fried's parents 'heartbroken' for son who wanted 'to do good'
https://www.mercurynews.com/2024/03/28/sam-bankman-frieds-parents-heartbroken-for-empathetic-son-who-wanted-to-do-good-on-a-large… 1/5

By
By MARTHA ROSS
MARTHA ROSS | Bay Area News Group
| Bay Area News Group
UPDATED:
UPDATED: March 29, 2024 at 8:46 AM PDT
March 29, 2024 at 8:46 AM PDT
Before a federal judge sentenced FTX founder Sam Bankman-Fried to 25 years in a federal
Before a federal judge sentenced FTX founder Sam Bankman-Fried to 25 years in a federal
prison for stealing billions of dollars from his cryptocurrency exchange customers
prison for stealing billions of dollars from his cryptocurrency exchange customers
Thursday, it became clear that his loyal, steadfast parents, Joseph Bankman and Barbara
Thursday, it became clear that his loyal, steadfast parents, Joseph Bankman and Barbara
Fried, were living in a different reality.
Fried, were living in a different reality.
As the Stanford law professors stared at the floor in front of them, U.S. District Court Judge
As the Stanford law professors stared at the floor in front of them, U.S. District Court Judge
Lewis A. Kaplan issued a stinging rebuke of their beloved, first-born child, who was
Lewis A. Kaplan issued a stinging rebuke of their beloved, first-born child, who was
convicted in November in what has been described as “one of the largest financial frauds in
convicted in November in what has been described as “one of the largest financial frauds in
history.”
history.”
The judge’s assessment of the disgraced, 32-year-old cryptocurrency mogul was at odds
The judge’s assessment of the disgraced, 32-year-old cryptocurrency mogul was at odds
with the sympathetic portrait offered by his parents in their pre-sentencing letters. They
with the sympathetic portrait offered by his parents in their pre-sentencing letters. They
described him as uniquely “empathetic” from a young age, indifferent to the trappings of
described him as uniquely “empathetic” from a young age, indifferent to the trappings of
wealth and power and only ever motivated by the desire “to do good on a large scale.”
wealth and power and only ever motivated by the desire “to do good on a large scale.”
“Sam lived an exemplary life in every way prior to the events that brought FTX down, not
“Sam lived an exemplary life in every way prior to the events that brought FTX down, not
merely avoiding doing bad things, but dedicating his life to doing good,” Barbara Fried
merely avoiding doing bad things, but dedicating his life to doing good,” Barbara Fried
wrote. “Only 32 years old and with his whole future in front of him, Sam now faces the
wrote. “Only 32 years old and with his whole future in front of him, Sam now faces the
prospect of spending much of the rest of his life in prison. … There are no words for the
prospect of spending much of the rest of his life in prison. … There are no words for the
grief we feel.”
grief we feel.”
It’s not known if Bankman and Fried were surprised by the 25-year sentence. It is
It’s not known if Bankman and Fried were surprised by the 25-year sentence. It is
considerably more than the 6½ years requested by his attorneys but also decades less than
considerably more than the 6½ years requested by his attorneys but also decades less than
the 40 to 50 years sought by prosecutors. Bankman-Fried faced a maximum sentence of
the 40 to 50 years sought by prosecutors. Bankman-Fried faced a maximum sentence of
110 years.
110 years.
But after the sentencing, the parents not surprisingly expressed their profound sadness
But after the sentencing, the parents not surprisingly expressed their profound sadness
and disappointment,
and disappointment, with CNN reporting
with CNN reporting that they issued a statement that said: “We are
that they issued a statement that said: “We are
heartbroken and will continue to fight for our son.” The parents in part were echoing the
heartbroken and will continue to fight for our son.” The parents in part were echoing the
vow of their son’s attorneys to appeal the conviction.
vow of their son’s attorneys to appeal the conviction.
In this courtroom sketch, Sam Bankman Fried’s parents Barbara Fried, left, and Joseph Bankman
In this courtroom sketch, Sam Bankman Fried’s parents Barbara Fried, left, and Joseph Bankman
react to the jury verdict in Manhattan federal court, Thursday, Nov. 2, 2023, in New York. A New
react to the jury verdict in Manhattan federal court, Thursday, Nov. 2, 2023, in New York. A New
York jury has convicted FTX founder Sam Bankman-Fried of fraud charges. (Elizabeth Williams via
York jury has convicted FTX founder Sam Bankman-Fried of fraud charges. (Elizabeth Williams via
AP)
AP)
In their letters, the once-popular Stanford professors also described the unique challenges
In their letters, the once-popular Stanford professors also described the unique challenges
their son has faced in life because he grew up socially awkward, living with “mannerisms”
their son has faced in life because he grew up socially awkward, living with “mannerisms”
associated with autism spectrum disorder and dealing with mental health issues. Yet,
associated with autism spectrum disorder and dealing with mental health issues. Yet,
despite these challenges, they said their son possessed a “natural kindness” and could be a
despite these challenges, they said their son possessed a “natural kindness” and could be a
“great listener.” At FTX, he only ever cared about doing what was best for his company, they
“great listener.” At FTX, he only ever cared about doing what was best for his company, they
said. “He told us he didn’t care about himself; all he cared about was living long enough to
said. “He told us he didn’t care about himself; all he cared about was living long enough to
make a significant difference in the world,” Fried said.
make a significant difference in the world,” Fried said.
Read More
Read More
00:18
00:18 02:00
02:00

Before Kaplan sentenced Bankman-Fried, he agreed that the MIT graduate was “extremely
Before Kaplan sentenced Bankman-Fried, he agreed that the MIT graduate was “extremely
smart,” “talented” and possibly a “high-achieving autistic person.” Kaplan also noted his
smart,” “talented” and possibly a “high-achieving autistic person.” Kaplan also noted his
privileged background, growing up “with loving and devoted parents” on the Stanford
privileged background, growing up “with loving and devoted parents” on the Stanford
University campus with “every advantage they could confer on him.” On one point, Kaplan
University campus with “every advantage they could confer on him.” On one point, Kaplan
seemed to agree with Bankman and Fried, saying that their son could been “capable of
seemed to agree with Bankman and Fried, saying that their son could been “capable of
huge accomplishments.”
huge accomplishments.”
But to Kaplan, the idiosyncratic, one-time billionaire also is a “criminal” who did things at
But to Kaplan, the idiosyncratic, one-time billionaire also is a “criminal” who did things at
FTX he knew were “wrong,” including allowing his trading firm Alameda to use FTX
FTX he knew were “wrong,” including allowing his trading firm Alameda to use FTX
customers’ money to invest in real estate and to donate to preferred political causes and
customers’ money to invest in real estate and to donate to preferred political causes and
charities.
charities.
“Mr. Bankman-Fried knew that Alameda was spending customer funds on risky
“Mr. Bankman-Fried knew that Alameda was spending customer funds on risky
investments, political contributions and Bahamas real estate,” Kaplan said. “The funds were
investments, political contributions and Bahamas real estate,” Kaplan said. “The funds were
not his to use.”
not his to use.”
Kaplan disputed the idea that Bankman-Fried was motivated by altruism. He said
Kaplan disputed the idea that Bankman-Fried was motivated by altruism. He said
Bankman-Fried wanted power and influence, not only in the burgeoning cryptocurrency
Bankman-Fried wanted power and influence, not only in the burgeoning cryptocurrency
industry, but also in politics. He “wanted to be a hugely, hugely politically influential person
industry, but also in politics. He “wanted to be a hugely, hugely politically influential person
in this country,” Kaplan said, agreeing with prosecutors that these ambitions propelled his
in this country,” Kaplan said, agreeing with prosecutors that these ambitions propelled his
financial crimes.
financial crimes.
Before being sentenced, Bankman-Fried, dressed in a loose-fitting brown jail uniform, gave
Before being sentenced, Bankman-Fried, dressed in a loose-fitting brown jail uniform, gave
a meandering statement in which he apologized to FTX’s customers, investors and
a meandering statement in which he apologized to FTX’s customers, investors and
employees,
employees, the New York Times
the New York Times and
and CNN reported.
CNN reported. “A lot of people feel really let down, and
“A lot of people feel really let down, and
they were very let down,” he said. “I’m sorry about that. I’m sorry about what happened at
they were very let down,” he said. “I’m sorry about that. I’m sorry about what happened at
every stage.” He added that his decisions “haunt” him every day.
every stage.” He added that his decisions “haunt” him every day.
Bankman-Fried’s mother confirmed in her letter that her son was “wracked with remorse”
Bankman-Fried’s mother confirmed in her letter that her son was “wracked with remorse”
for not preventing the collapse of FTX. “It is, he has told me, the first thing he thinks about
for not preventing the collapse of FTX. “It is, he has told me, the first thing he thinks about
when he wakes up and the last thing he thinks about when go goes to sleep, and it
when he wakes up and the last thing he thinks about when go goes to sleep, and it
occupies many moments in between,” she wrote.
occupies many moments in between,” she wrote.
But Kaplan didn’t sound impressed by other things he learned about Bankman-Fried
But Kaplan didn’t sound impressed by other things he learned about Bankman-Fried
through court filings and during the trial. He found the defendant had attempted to
through court filings and during the trial. He found the defendant had attempted to
tamper with witnesses, perjured himself and falsely testified about when he learned that
tamper with witnesses, perjured himself and falsely testified about when he learned that
FTX had lost $8 billion. The judge remarked on “the brazenness of his actions, his
FTX had lost $8 billion. The judge remarked on “the brazenness of his actions, his
exceptional flexibility with the truth (and) his apparent lack of any remorse.”
exceptional flexibility with the truth (and) his apparent lack of any remorse.”
Kaplan furthermore rejected a claim made by the defense and by Fried — that the financial
Kaplan furthermore rejected a claim made by the defense and by Fried — that the financial
losses faced by customers and other creditors would be “compensated in full.” Kaplan said
losses faced by customers and other creditors would be “compensated in full.” Kaplan said
this claim is “is misleading, it is logically flawed, it is speculative.”
this claim is “is misleading, it is logically flawed, it is speculative.”


2024
2024 
March
March 
28
28
Originally Published:
Originally Published: March 28, 2024 at 4:46 PM PDT
March 28, 2024 at 4:46 PM PDT
For his part, Joseph Bankman acknowledged that his view of his son “is strongly at odds
For his part, Joseph Bankman acknowledged that his view of his son “is strongly at odds
with how the public sees him.” He said, “I could add hundreds of examples of his kindness
with how the public sees him.” He said, “I could add hundreds of examples of his kindness
and deep concern for others, but I’m not sure how much difference they would make.” If
and deep concern for others, but I’m not sure how much difference they would make.” If
nothing else, Bankman and Fried hoped the judge would consider leniency because their
nothing else, Bankman and Fried hoped the judge would consider leniency because their
son’s possible autism and difficulty in reacting to basic social cues could put him at risk in
son’s possible autism and difficulty in reacting to basic social cues could put him at risk in
prison.
prison.
“I genuinely fear for Sam’s life in the typical prison environment.” Fried said, while
“I genuinely fear for Sam’s life in the typical prison environment.” Fried said, while
Bankman ended his letter by saying, “Nothing he has done can justify putting him at risk.”
Bankman ended his letter by saying, “Nothing he has done can justify putting him at risk.”
He also said, “Once free, he has the potential to benefit others. That’s all he has ever
He also said, “Once free, he has the potential to benefit others. That’s all he has ever
wanted to do.”
wanted to do.”
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POLITICS
Exclusive: Effective Altruist Leaders Were
Repeatedly Warned About Sam Bankman-
Fried Years Before FTX Collapsed
16 MINUTE READ
Photo Illustration by Neil Jamieson from TIME
BY CHARLOTTE ALTER
MARCH 15, 2023 7:00 AM EDT
L
eaders of the Effective Altruism movement were repeatedly warned
beginning in 2018 that Sam Bankman-Fried was unethical, duplicitous, and
negligent in his role as CEO of Alameda Research, the crypto trading firm that
went on to play a critical role in what federal prosecutors now say was among
the biggest financial frauds in U.S. history. They apparently dismissed those
warnings, sources say, before taking tens of millions of dollars from Bankman-
Fried’s charitable fund for effective altruist causes.
When Alameda and Bankman-Fried’s cryptocurrency exchange FTX imploded in
late 2022, these same effective altruist (EA) leaders professed outrage and
ignorance. “I don’t know which emotion is stronger: my utter rage at Sam (and
others?) for causing such harm to so many people, or my sadness and self-
hatred for falling for this deception,” tweeted Will MacAskill, the Oxford moral
14.03.2025, 10:28 Effective Altruist Leaders Were Warned About Sam Bankman-Fried Years Before FTX Collapse | TIME
https://time.com/6262810/sam-bankman-fried-effective-altruism-alameda-ftx/ 1/9
philosopher and intellectual figurehead of EA, who co-founded the Centre for
Effective Altruism.
Yet MacAskill had long been aware of concerns around Bankman-Fried. He was
personally cautioned about Bankman-Fried by at least three different people in a
series of conversations in 2018 and 2019, according to interviews with four
people familiar with those discussions and emails reviewed by TIME.
He wasn’t alone. Multiple EA leaders knew about the red flags surrounding
Bankman-Fried by 2019, according to a TIME investigation based on
contemporaneous documents and interviews with seven people familiar with the
matter. Among the EA brain trust personally notified about Bankman-Fried’s
questionable behavior and business ethics were Nick Beckstead, a moral
philosopher who went on to lead Bankman-Fried’s philanthropic arm, the FTX
Future Fund, and Holden Karnofsky, co-CEO of OpenPhilanthropy, a nonprofit
organization that makes grants supporting EA causes. Some of the warnings
were serious: sources say that MacAskill and Beckstead were repeatedly told
that Bankman-Fried was untrustworthy, had inappropriate sexual relationships
with subordinates, refused to implement standard business practices, and had
been caught lying during his first months running Alameda, a crypto firm that
was seeded by EA investors, staffed by EAs, and dedicating to making money
that could be donated to EA causes.
More from TIME
These repeated warnings to EA leaders, which have not been previously
reported, represented a crossroads—for the budding crypto billionaire; for EA, a
social movement dedicated to using reason to do the most good in the world;
and for businesses and investors drawn into Bankman-Fried’s crypto empire,
which imploded in Nov. 2022, vaporizing more than $8 billion in customer funds.
Many of the emerging issues at Alameda that were reported to EA leaders
beginning in 2018—including pervasive dishonesty, sloppy accounting, and
rejection of corporate controls—presaged the scandal that unfolded at FTX four
years later, according to sources who were granted anonymity to avoid
professional retribution or becoming entangled in Bankman-Fried’s ongoing legal
drama. “I was shocked at how much of what came out about FTX rhymed with
the concerns we raised in the early days,” says one person who spoke directly

with MacAskill and others about Bankman-Fried in 2018. “It was the same thing.
All of the same problems.”
It’s not entirely clear how EA leaders reacted to the warnings. Sources familiar
with the discussions told TIME that the concerns were downplayed, rationalized
as typical startup squabbles, or dismissed as “he said-she said,” as two people
put it. EA leaders declined or did not respond to multiple requests from TIME to
explain their reaction to these warnings and what they did in response. But by
the end of 2018, Bankman-Fried’s behavior was such an open secret that EA
leaders were debating Bankman-Fried’s presence on the board of the Centre for
Effective Altruism. In emails among senior EA leaders, which TIME reviewed,
one person wrote that they had raised worries about Bankman-Fried’s
trustworthiness directly with MacAskill, and that MacAskill had dismissed the
concerns as “rumor.” In 2019, Bankman-Fried left CEA’s board.
MacAskill declined to answer a list of detailed questions from TIME for this
story. “An independent investigation has been commissioned to look into these
issues; I don’t want to front-run or undermine that process by discussing my
own recollections publicly,” he wrote in an email. “I look forward to the results of
the investigation and hope to be able to respond more fully after then.” Citing
the same investigation, Beckstead also declined to answer detailed questions.
Karnofsky did not respond to a list of questions from TIME. Through a lawyer,
Bankman-Fried also declined to respond to a list of detailed written questions.
The Centre for Effective Altruism (CEA) did not reply to multiple requests to
explain why Bankman-Fried left the board in 2019. A spokesperson for Effective
Ventures, the parent organization of CEA, cited the independent investigation,
launched in Dec. 2022, and declined to comment while it was ongoing.
No one has alleged criminal behavior on the part of top EA figures. None of the
people who raised concerns about Bankman-Fried to EA leaders in 2018 and
2019 say they warned about specific criminal activity, nor did they foresee the
size and scope of the alleged fraud at the heart of the FTX collapse. In charging
documents, federal prosecutors identify the start of Bankman-Fried’s alleged
fraud as 2019.
Why did the braintrust of a social movement dedicated to virtuous impact
apparently fail to heed repeated warnings about one of their own, while
continuing to promote him publicly as a force for good? For a group of
philosophers who had spent their lives contemplating moral tradeoffs and
weighing existential risks, the warnings about Bankman-Fried may have
presented a choice between embracing a big donor with questionable ethics or
foregoing millions of dollars they believed could boost their nascent movement
to help save the future of humanity. In a span of less than nine months in 2022,
Bankman-Fried’s FTX Future Fund—helmed by Beckstead—gave more than
$160 million to effective altruist causes, including more than $33 million to
organizations connected to MacAskill. “If [Bankman-Fried] wasn’t super wealthy,
nobody would have given him another chance,” says one person who worked
closely with MacAskill at an EA organization. “It’s greed for access to a bunch
of money, but with a philosopher twist.”
Associate philosophy professor William MacAskill, at his office in Oxford on July 14, 2022. Sophie Green for TIME
Sam Bankman-Fried and Will MacAskill weren’t just philosophical allies. They
were old friends. The two met in 2013, when Bankman-Fried was still an
undergrad at MIT. MacAskill convinced the young utilitarian math geek that he
could maximize his impact by taking a high-paying finance job and giving his
money away. Effective Altruists call this “earning to give.”
Alameda was “earning to give” on crypto steroids. Launched in the fall of 2017
by Bankman-Fried, who had most recently worked at a quantitative trading firm
called Jane Street Capital, and Tara Mac Aulay, who had been the CEO of the
Centre for Effective Altruism, it was explicitly an EA project from the start,
linked to the relatively new idea that more money could lead to more impact for
effective altruist causes. “Almost everyone who came on in those early days
was an EA. They were there for EA reasons,” says Naia Bouscal, a former
software engineer at Alameda. “That was the pitch we gave people: this is an EA
thing.”
Mac Aulay and Bankman-Fried originally planned to donate 50% of company
profits to EA causes, and many of the executives also planned to donate most

of their salaries. The initial funding for Alameda came from two influential EA
donors: Luke Ding, a former currency trader who invested $6 million, and Jaan
Tallinn, who loaned the firm $110 million worth of Ether, according to
Semafor. Sources say that without the help of EA donors, it would have taken
months to get anywhere near that amount of money, and never on such
favorable terms.
But within months, the good karma of the venture dissipated in a series of
internal clashes, many details of which have not been previously reported.
Some of the issues were personal. Bankman-Fried could be “dictatorial,”
according to one former colleague. Three former Alameda employees told TIME
he had inappropriate romantic relationships with his subordinates. Early
Alameda executives also believed he had reneged on an equity arrangement
that would have left Bankman-Fried with 40% control of the firm, according to a
document reviewed by TIME. Instead, according to two people with knowledge
of the situation, he had registered himself as sole owner of Alameda.
Read More: Effective Altruism Promises To Do Good Better. These Women Say
It Has a Toxic Culture Of Sexual Harassment and Abuse.
Bankman-Fried’s approach to managing the business was an even bigger
problem. “As we started to implement some of the really basic, standard
corporate controls, we found more and more cases where I thought Sam had
taken dangerous and egregious shortcuts,” says one person who later raised
concerns about Bankman-Fried to EA leaders. “And in many cases [he] had
concealed the fact that he had done that.”
“We didn’t know how much money we actually had. We didn’t have a clear
accounting record of all the trades we’d done,” Bouscal says. “Sam continued
pushing us more and more in this direction of doing a huge number of trades, a
huge number of transfers, and we couldn’t account for that.” At the same time,
she adds, Bankman-Fried was spending enormous amounts of money because
“he didn’t have a distinction between firm capital and trading capital. It was all
one pool.”
Colleagues concluded Bankman-Fried had to go, and prepared an attempt to
push him out. In early April 2018, four Alameda executives summoned
Bankman-Fried to a conference room in the firm’s new Berkeley, Calif., offices
for what one participant describes as an “intervention-style confrontation.” In a
planning document prepared for that confrontation and reviewed exclusively by
TIME, they accuse him of “gross negligence,” “willful and wanton conduct that is
reasonably considered to cause injury,” and “willful and knowing violations of
agreements or obligations, particularly with regards to creditors”—all language
that echoes the U.S. criminal code.
The document, which has not been previously reported, accuses Bankman-Fried
of dismissing calls for stronger accounting and inflating the expected value of
adding new exchanges, and said a majority of employees thought he was
“negligent” and “unethical.” It also alleges he was “misreporting numbers” and
“failing to update investors on poor performance.” The team “didn’t trust Sam to
be in investor meetings alone,” colleagues wrote. “Sam will lie, and distort the
truth for his own gain,” the document says.
The meeting was short. Mac Aulay and the management team offered Bankman-
Fried a buyout in exchange for his resignation as CEO, and threatened to quit if
he refused. Bankman-Fried sat there silently, according to two people present,
then got up and left. The next day, he came back with his answer: he would not
step down. Instead, the other four members of the management team resigned,
along with roughly half of Alameda’s 30 employees. Mac Aulay, an Australian
citizen, was forced to leave the country shortly afterward, because her work
visa was tied to Alameda.
In the weeks leading up to that April 2018 confrontation with Bankman-Fried and
in the months that followed, Mac Aulay and others warned MacAskill, Beckstead
and Karnofsky about her co-founder’s alleged duplicity and unscrupulous
business ethics, according to four people with knowledge of those discussions.
Mac Aulay specifically flagged her concerns about Bankman-Fried’s honesty
and trustworthiness, his maneuvering to control 100% of the company despite
promising otherwise, his pattern of unethical behavior, and his inappropriate
relationships with subordinates, sources say.
Bouscal recalled speaking to Mac Aulay immediately after one of Mac Aulay’s
conversations with MacAskill in late 2018. “Will basically took Sam’s side,” said
Bouscal, who recalls waiting with Mac Aulay in the Stockholm airport while she
was on the phone. (Bouscal and Mac Aulay had once dated; though no longer
romantically involved, they remain close friends.) “Will basically threatened
Tara,” Bouscal recalls. “I remember my impression being that Will was taking a
pretty hostile stance here and that he was just believing Sam’s side of the story,
which made no sense to me.”
“He was treating it like a ‘he said-she said,’ even though every other long-time
EA involved had left because of the same concerns,” Bouscal adds.
Another early Alameda employee, who witnessed Bankman-Fried’s behavior but
didn’t speak up, says that Bankman-Fried’s clout within EA, bolstered by his
close relationship to MacAskill, discouraged people from speaking out against
him, particularly if they wanted to work in EA organizations in the future.
But one of the people who did warn others about Bankman-Fried says that he
openly wielded this power when challenged. “It was like, ‘I could destroy you,’”
this person says. “Will and Holden would believe me over you. No one is going
to believe you.”

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange,
leaves following a hearing at Manhattan federal court on Jan. 3. Andrew Kelly—Reuters/Alamy
The blowup at Alameda rippled through the EA movement. The mutiny—and its
causes—would have been hard for the movement’s leaders to miss, according
to three people at EA organizations who heard about the implosion and the
allegations that surrounded it. “It’s very implausible that a bunch of the leaders
didn’t know quite a lot of details about what happened internally, because it was
such a major thing in the EA community,” says the person who worked with
MacAskill at an EA organization.
Mac Aulay, who had perhaps raised the loudest concerns about Bankman-Fried,
was distrusted by some EA leaders because of internal politics during her time
at the Centre for Effective Altruism, according to a senior member of the EA
community who heard about the warnings after the fact. Still, this person says,
“both Will and Nick had significant amounts of evidence that Sam was not
ethically good. That puts you in really murky territory: what are you supposed to
do with that information?”
In the aftermath, Mac Aulay receded from the movement. Bankman-Fried moved
to Hong Kong and rebuilt the firm with a small cohort of close allies, including
Caroline Ellison, who later became Alameda’s CEO. In the spring of 2019, while
still running Alameda, Bankman-Fried started FTX. The crossroads had come
and gone.
Sometime that year, the Centre for Effective Altruism did an internal
investigation relating to CEA and Alameda, according to one person who was
contacted during the investigation, and who said it was was conducted in part by
MacAskill. Bankman-Fried left the board of the organization in 2019. The Centre
for Effective Altruism did not respond to repeated requests from TIME to
discuss the circumstances leading to his departure; MacAskill and others
declined multiple opportunities to answer questions about those events.
Even after Bankman-Fried left the board of CEA, he retained MacAskill’s
support, both in public and private. In a 2022 interview on the 80,000 Hours
podcast, MacAskill describes himself as “remarkably aligned with Sam,” and
said the FTX Future Fund could be a “an enormous inflection point for EA.” FTX
advertisements used the language of effective altruism. “I’m on crypto because
I want to make the biggest global impact for good,” read one FTX ad, which
featured a photo of Bankman-Fried.
When Elon Musk was buying Twitter in 2022, MacAskill texted Musk to offer to
introduce him to Bankman-Fried, according to text messages released during a
lawsuit surrounding Musk’s acquisition of Twitter. MacAskill referred to the FTX
founder as “my collaborator,” who had expressed interest in buying Twitter “and
making it better for the world.”
“You vouch for him?” Musk asked MacAskill.
“Very much so!” MacAskill replied. “Very dedicated to making the long-term
future of humanity go well.”
Read More: Want To Do More Good? This Movement Might Have the Answer.
By that time, EA’s bet on Bankman-Fried seemed to be paying off handsomely.
In 2022, Bankman-Fried started a charitable arm of FTX to fund EA causes, led
by Beckstead, one of the philosopher leaders of EA who had been warned in
2018 by Bankman-Fried’s colleagues. In its brief existence, the Fund gave more
than $30 million to organizations connected to MacAskill, including $13.9 million
to CEA and $17.9 million to Longview Philanthropy, where he sits on the
advisory board.
In the meantime, Bankman-Fried was at the helm of what prosecutors have cast
as one of the biggest financial scandals in American history. “Never in my
career have I seen such an utter failure of corporate controls at every level of
an organization,” John Ray, who was brought in to manage FTX’s bankruptcy
after the company imploded, testified to Congress. The SEC complaint alleges
that there “was no meaningful distinction between FTX customer funds and
Alameda’s own funds,” and that Bankman-Fried used Alameda as his “personal
piggy bank.” Federal prosecutors allege that from 2019 onwards, Bankman-Fried
spent billions of dollars of customer money to finance Alameda trading,
Bankman-Fried’s investments, and bankroll straw political donations. Among
other things, prosecutors say, the money was used to “make charitable
contributions.” Bankman-Fried is facing 12 criminal charges; he has pleaded not
guilty.

Rep. Van Taylor, R-Texas, reacts to the statement of John J. Ray III, CEO of FTX Group, that FTX used QuickBooks for accounting,
during the House Financial Services Committee hearing titled "Investigating the Collapse of FTX, Part I," on Dec. 13, 2022. Ray took over
after the resignation of Sam Bankman-Fried. Tom Williams—CQ Roll Call/AP
None of the early Alameda employees who witnessed Bankman-Fried’s behavior
years earlier say they anticipated this level of alleged criminal fraud. There was
no “smoking gun,” as one put it, that revealed specific examples of lawbreaking.
Even if they knew Bankman-Fried was dishonest and unethical, they say, none
of them could have foreseen a fraud of this scope.
After FTX collapsed, MacAskill conveyed his dismay in a series of tweets
expressing surprise. “I cannot in words convey how strongly I condemn what
they did,” MacAskill tweeted. “I had put my trust in Sam, and if he lied and
misused customer funds he betrayed me, just as he betrayed his customers, his
employees, his investors, & the communities he was a part of.”
It was quite a turnaround for the visionary leader of the futurist movement. Just
months earlier, in Aug. 2022, MacAskill published his second book, What We
Owe the Future, about the moral duty to confront existential risks to humanity.
“History is littered with people doing bad things while believing they were doing
good,” MacAskill writes in the book. “We should do our utmost to avoid being
one of them.” To celebrate its publication, the moral philosopher invited a group
of luminaries to a dinner at Eleven Madison Park, the ultra-luxurious vegan
restaurant where the tasting menu runs $438 per person with tip, before tax. The
event, MacAskill wrote in an email invitation, “is hosted by my friend, Sam
Bankman-Fried.”
Correction appended, Dec. 4, 2024: The original version of this story
misstated whether Oxford's Global Priorities Institute received a grant of $1.2
million from FTX's philanthropic arm. FTX pledged the gift, but the Institute did
not take the money.
Annals of Inquiry
Sam Bankman-Fried, Effective Altruism,
and the Question of Complicity
Leaders of the social movement had no way to know that FTX would collapse. But they also had
every incentive to ignore warnings.
By Gideon Lewis-Kraus
December 1, 2022
Some members of the effective-altruism community are concerned that a path may exist from their shared
philosophical underpinnings to Sam Bankman-Fried’s deceit. Photograph by Erika P. Rodriguez / NYT / Redux
14.03.2025, 10:26 Sam Bankman-Fried, Effective Altruism, and the Question of Complicity | The New Yorker
https://www.newyorker.com/news/annals-of-inquiry/sam-bankman-fried-effective-altruism-and-the-question-of-complicity 1/6

One of the inevitable questions to have attended the abrupt undoing of the
erstwhile billionaire Sam Bankman-Fried—the overnight collapse of his
cryptocurrency exchange, FTX, and its intertwined sister organization, the
trading firm Alameda Research—concerns that of the part in the fiasco played
by ideas. Neither Bernie Madoff, Kenneth Lay, nor Jeff Skilling was, to the best
of my knowledge, associated with a particular philosophical tradition.
Bankman-Fried has, however, identified himself as an adept of effective
altruism, the utilitarian-flavored philanthropic social movement. Bankman-
Fried first encountered effective altruism, or E.A., as an M.I.T. undergraduate,
when he was introduced to the Oxford philosopher Will MacAskill. E.A.
leaders recruited Bankman-Fried as someone likely to make a lot of money that
he might then give away for the betterment of the world. In less than a decade,
the investment seemed to have proved auspicious: Bankman-Fried became the
movement’s most prominent donor, promising to eventually donate almost all
of his net worth, which was once estimated at twenty-six billion dollars. He has
said, on multiple occasions, that his consideration for the lives of others aroused
his appetite for financial risk: had he been working merely for his own pleasure,
he might have comfortably retired a minor billionaire, but there is no
diminishing marginal utility to each additional dollar earned to redeem the
world.
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Gideon Lewis-Kraus is a staff writer at The New Yorker covering technology, academia,
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Long reads 3 November 2023
Sam Bankman-Fried and the effective altruism delusion
Will the idealist philosophy survive the conviction of its crypto king?
By Sophie McBain

In this section 
14.03.2025, 10:25 Sam Bankman-Fried and the effective altruism delusion - New Statesman
https://www.newstatesman.com/long-reads/2023/11/sam-bankman-fried-crypto-king-effective-altruism 1/25
   
Illustration by Andrei Cojocaru

In this section 

T
Editor’s note: This article was originally published on 20 September. On 3 November, “Crypto
King” Sam Bankman-Fried was found guilty of fraud and money laundering. Sophie McBain
looks at whether the idealist effective altruism philosophy will survive his conviction.
he moral philosopher met a brilliant American maths student who wanted to
know how he could do the most good in the world. How about becoming a
banker, the philosopher said.
No, seriously.
Think of it like this. With his high grades, the student could do pretty much
anything. He could become a doctor in a poor country, and then he might perform
life-saving surgery ten times a week, saving 500 lives a year. But if he became a
banker he could donate enough money to finance the salaries of ten doctors, saving
ten times as many lives. Plus, if he didn’t become a doctor, someone else was likely
to do the same job. But if he didn’t become a banker, who else would step in to fund
the doctors?
William MacAskill, the moral philosopher, was a leading “effective altruist”
, someone
who thought about morality in a scientific way, crunching the numbers to determine
the “best” method of helping others. He had helped found a careers-advice
organisation pitched at top graduates, one that encouraged would-be aid workers
to consider more lucrative work so that they could “earn to give”
.
[See also: “The biggest Ponzi of all time”: why Ben McKenzie became a crypto critic]
And so the American maths student, Sam Bankman-Fried, took a job in finance,
where he developed an interest in crypto. He set up his own firm and went on to
make billions on crypto arbitrage, taking advantage of the price discrepancies that
can arise in the digital-currency markets. He pledged hundreds of millions in
donations, mostly to organisations linked to his friend, the moral philosopher. In
interviews the student, by now a famous crypto king, explained that your incentives
are different when you are making money in order to give it away. When you’re
doing good, there are no diminishing marginal returns – and so it makes sense to
take bigger gambles, to be aggressive.
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But the crypto king was also taking different kinds of risk. In December 2022 he was
arrested and accused of defrauding his customers, owing them approximately $8bn.
In February 2023, he asked his donees to return their gifts, or risk them being seized
during bankruptcy proceedings.
On Twitter the philosopher expressed his “utter rage” at the crypto king, and his
“sadness and self-hatred” for falling for his deception. He acknowledged that he had
not heeded concerns that his own moral ideas could be misused. The crypto king’s
actions ran contrary to effective altruism, which emphasises “the importance of
integrity, honesty and the respect of common-sense moral constraints”
, he tweeted.
Which would have been an adequate response if the story of the moral philosopher
and the crypto king were merely a thought experiment, an abstract scenario used to
test an idea. But real life is messier and more complex. On 2 November, the crypto
king was convicted in a New Y
ork court on seven counts of fraud and money
laundering. Questions have been asked of the philosopher, too: how much did he
know? Was his big idea fundamentally flawed?
The story of how the Oxford philosopher MacAskill and the effective altruism (EA)
movement found itself entangled with the disgraced Bankman-Fried is partly about
moral principles. Why should someone like Bankman-Fried find EA’s ideology so
compelling – or at least convenient? But mostly it is about politics, the corruptive
influence of power and money – the unforeseen (but not unpredictable)
consequences of telling people that the best way to do good is to get rich.
ow, a thought experiment. Imagine you find a toddler drowning in a shallow
pond. Should you wade in and save them, even if your clothes get muddy?
Well, of course! Would you agree, then, that if it’s in your power to stop something
very bad from happening, at minimal cost to yourself, you should do it?
Subscribe
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What if a child is at risk of drowning in floodwaters many thousands of miles away,
and a small donation could save their life? In his 1972 paper “Famine, Affluence, and
Morality” the Australian philosopher Peter Singer argued that failing to contribute
to disaster relief is morally equivalent to walking past a drowning toddler. Our moral
obligations are much greater than almost anyone is willing to acknowledge, he
wrote. It is morally wrong to buy unnecessary things – like new clothes – when we
could be giving to life-saving causes.
Some people encountering Singer’s paper for the first time will try to find holes in it;
others might not bother. It is much easier to file this argument alongside the other
inconvenient information we’re required to ignore if we are to enjoy buying
pointless stuff on this ever-warming planet. Effective altruists are different. They are
generally people who have always taken morality far more seriously than their peers.
They were the kids who turned vegetarian aged six and gave all their pocket money
to charity, who volunteered at the local homeless shelter. Some have donated a
kidney to a stranger; some volunteered to take part in Covid vaccine trials.
When the Bankman-Fried crisis broke, Julia Wise, the US-based community liaison
for the Centre for Effective Altruism, said she felt “horrified and disappointed”
. “So
many people in the community had made really thoughtful choices about how to
help others, and here was this person acting so recklessly and undoing other
people’s good work,
” she told me. A year on, she said most EAs were setting their
outrage aside, as “all these important problems in the world are still there”
.
Alongside the extreme do-gooders, EA has long fostered a darker, millenarian
streak. Since Bankman-Fried’s downfall, it has faced more reputational crises. In
January this year, an email written in 1997 by Nick Bostrom – a futurist philosopher
whose ideas are influential within the movement – resurfaced in which he used the
N-word and said he believed that black people are more stupid than white people.
(He apologised for “this disgusting email from 26 years ago… [which] does not
accurately represent my views then, or now”
, while adding that inequality leads to
differences in skills and cognitive ability.)
The following month, in a further blow for effective altruism’s reputation, Time
magazine published allegations of widespread sexual harassment within the EA
community.
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How did a school of thought built on extreme altruism provide ideological cover for
racism and sexism – and end up promoting Bankman-Fried? The person best placed
to answer this would be MacAskill – he helped lay out EA’s philosophical framework,
has sat on the boards of many major EA institutions and formerly described
Bankman-Fried as a “collaborator” – but he has remained conspicuously quiet. He
declined to be interviewed for this article, citing work commitments, and hasn’t
commented on Bankman-Fried publicly since June, when he said that “even in
hindsight” he had no reason to suspect the billionaire of fraud. He also posted a
bizarre document he’
d written in the third person titled “Will MacAskill should not
be the face of EA”
.
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Illustration by André Carrilho
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E
ven before he encountered Singer’s work, MacAskill demonstrated unusual
moral zeal. While still a schoolboy, attending the private Hutchesons’
Grammar School in Glasgow, he worked at a care home for the elderly and
volunteered with Glasgow Disabled Scouts. He studied philosophy at Cambridge
and moved to Oxford as a postgraduate, where he met Toby Ord, a philosopher
who was similarly committed to Singer’s challenge. Ord had pledged to give away all
his earnings above £20,000. MacAskill followed suit.
As utilitarians, both men agreed that what mattered morally wasn’t the act of
donating but the impact their donations would have. A £6 gift to an animal shelter
would have a negligible impact – but the same donation to a malaria charity could
protect a child in the developing world from a disease that kills over 600,000 people
a year. One of the central insights driving EA was that most people give surprisingly
little thought to the impact of their charitable giving. Donations tend to be driven by
emotion – you give to a cancer charity because your grandmother died of the
disease, or to a donkey charity because donkeys are cute – rather than reason. What
if we tried to direct charitable funds more strategically, to make the money go
further?
In 2009, Ord and MacAskill launched Giving What We Can, an organisation that
encouraged people to pledge 10 per cent of their income to charity. They began
with 23 members, among them Peter Singer; many of the others would go on to hold
influential positions within EA organisations. One was Ben Todd, with whom
MacAskill founded the careers organisation 80,000 Hours in 2011, promoting jobs
that would enable graduates to give. In 2012 MacAskill and Ord founded the Centre
for Effective Altruism, a charity aimed at building their movement, seeding EA
chapters at universities, and encouraging the exchange of ideas at conferences and
via an online EA forum. While Oxford University became a hub in the UK, EA also
developed a strong presence in the US, through organisations such as GiveWell,
Good Ventures and the Open Philanthropy foundation. It was also embraced by the
rationalist movement, a subculture that developed around sites such as
LessWrong.com and in Silicon Valley, whose adherents aim to expunge themselves
of cognitive bias, applying probabilistic reasoning to every aspect of their lives.
[See also: The great attention deficit: what’s fuelling the rise in adult ADHD?]
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F
or some people, the idea that moral choices are an intellectual problem –
solvable with maths – is appealing. But how do you quantify good? In his 2015
book Doing Good Better, MacAskill proposed using “quality-adjusted life years”
(QALYs), a measure used by welfare economists that attempts to quantify the
detrimental effects of disabilities and diseases.
One year in perfect health is defined as 1 QALY, while one year of life with untreated
Aids is 0.5, according to the weighting cited by MacAskill; for someone living with
blindness, a year of life has a QALY score of 0.4; and for someone with moderate
depression it is 0.3. MacAskill writes that QALYs can be used to decide which
charitable causes to prioritise: faced with a choice between spending $10,000 to
save a 20-year-old from blindness or the same amount on antiretroviral therapy for
a 30-year-old with Aids – a treatment that will improve their life and extend it by ten
years – MacAskill argues it would be better to perform the sight-saving surgery, as
the 20-year-old can expect to live another 50 years. He acknowledges that QALYs
are an “imperfect”
, “contested” measure but sees them as mostly good enough.
And yet, using QALYs is also a scientific-sounding way of valuing the life of a sighted
person over that of a blind person: it suggests that when a fire engulfs a nursery, you
should save the twin with good vision first. And how do QALYs translate across
species? In his 1975 book Animal Liberation, Singer argued that a chimpanzee or dog
might have a greater capacity for meaningful relationships than a “severely retarded
infant”; in these circumstances, Singer writes, it may be better to save the life of the
animal. At what point do you stop counting?
In 2013, a leading EA argued in his graduate thesis at Rutgers University that because
people in richer countries are, on average, more productive and more innovative, it
is better to save their lives than those of people living in poor countries. If you find
such positions repugnant, is this a mistake in the maths or the measurements – or a
problem of underlying values? EA encouraged robust debate on difficult subjects,
but utilitarian calculations can be co-opted to justify extremely weird and
potentially harmful positions.
Early critics of EA also highlighted its convenient political quietism: instead of
paying for bed nets and de-worming treatments for the global poor (two causes EA
deems highly effective), shouldn’t its proponents be agitating for changes to a
political system that puts someone earning the mean UK salary in the top 2 per cent
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I
of earners globally? The impact of political action is hard to account for in a
spreadsheet, but is that a reason to avoid it?
“Effective altruism doesn’t try to understand how power works, except to better
align itself with it. In this sense it leaves everything just as it is,
” the Oxford
philosopher Amia Srinivasan wrote in the London Review of Books in 2015. Noting that
EAs are mostly middle-class white men, she added: “This is no doubt comforting to
those who enjoy the status quo – and may in part account for the movement’s
success.
”
EA was the radical movement that bankers and billionaires could buy into.
n the years before the Sam Bankman-Fried crisis, EA got rich fast. In 2021 Ben
Todd of 80,000 Hours estimated that around $46bn had been committed to the
movement worldwide. Much of this came from donors such as the Facebook co-
founder Dustin Moskovitz and his wife, Cari Tuna, who had committed to giving
away a majority of their estimated $25bn fortune through their EA-affiliated
organisations Open Philanthropy and Good Ventures. And then there was
Bankman-Fried.
In February 2022 Bankman-Fried launched another philanthropic organisation, the
FTX Future Fund. MacAskill was on the advisory board. The fund pledged to spend
“up to $1bn” in its first year, and by June 2022 claimed to have spent $132m. Of these
grants, $36.5m went to charities and institutions grouped under the umbrella
organisation Effective Ventures UK, at least four of which were co-founded by
MacAskill: Giving What We Can, the Centre for Effective Altruism, 80,000 Hours
and the Global Priorities Institute, a research centre. (MacAskill also chaired the
trustees of Effective Ventures UK until 21 September, the day after this article went
to press.) A few mega-donors now wielded a huge amount of unaccountable power
over the movement.
But few EA leaders, many of whom are academic philosophers, had practical
experience of running large businesses or charities. In interviews with me,
disillusioned former members accused the leadership of arrogance. “The leaders
were intellectually elitist and thought that, on their intelligence alone, they could
make decisions better than people who had practical, demonstrable skills,
” said one
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– who, like many people I spoke to, requested anonymity for fear of reprisals. “I
honestly felt terrified… there were no adults in the room.
”
The leadership was cliquey, and professional boundaries were blurred: EA’s donors,
its executive teams, trustees and many beneficiaries were long-standing friends.
Former members told me the movement became a bubble: people worked together,
hung out together, slept together and consulted the same EA therapists.
People were sometimes afraid to criticise EA decisions because they worried about
being seen as stupid, Larissa Hesketh-Rowe, a former CEO of the Centre for
Effective Altruism, told me. “It could be hard to raise concerns and criticise
decisions in a community so focused on intellect and impact. It can be easy to feel
that, if something raises alarm bells to you but no one else, maybe that’s because
you’re not smart enough or dedicated enough. In reality, the community, like any
other, has blind spots.
” Hesketh-Rowe, who left in 2019, felt that “when people
believe their cause is especially important and that they are especially smart, it can
be all too easy to stray into finding ways to justify behaviour that stems from normal
human flaws. Y
ou don’t like someone: maybe they are bad for the movement. Y
ou
want a higher salary: maybe you need that to be productive.
”
As ever more funding was funnelled into EA institutions, the once ascetic movement
started to shift its attitude towards money. Hesketh-Rowe told me that, “once the
community got more money, there were more discussions of, ‘Well, if you can save
time by spending money, maybe you should. Maybe you should take a taxi instead
of taking the bus or the train. Get a nicer desk, spend more to move closer to work –
if it’s going to make you more productive.
’” It wasn’t a unique business philosophy,
but how did it fit with EA’s principles? “The line of reasoning isn’t completely wrong,
but that’s what makes it risky,
” said Hesketh-Rowe. “Y
ou need strong character, a
good culture and leadership to navigate it, otherwise it’s too easy to accidently drift
in the direction of corruption.
”
This is how the movement that once agonised over the benefits of distributing $1
de-worming pills to African children ended up owning two large estates: the $3.5m
Chateau Hostačov in the Czech Republic, purchased in 2022 by the small EA-
affiliated European Summer Program on Rationality with a donation from
Bankman-Fried’s FTX Foundation; and Wytham Abbey, a 15th-century manor house
near Oxford, bought for £15m to host EA retreats and conferences. Wytham Abbey,
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L
which is undergoing restoration, was purchased by the Effective Ventures
Foundation (the UK umbrella group for EA) using a £17m grant from Open
Philanthropy (the US EA foundation set up by Moskovitz and Tuna).
On the EA forum, several people have questioned the “optics” of this purchase:
“Y
ou’ve underestimated the damage this will do to the EA brand,
” wrote one in late
2022. “The hummus and baguettes signal earnestness. Abbey signals scam.
” But
many defended the decision: “I’ve been to about 70 conferences in my academic
career, and I’m [sic] noticed that the aesthetics, antiquity and uniqueness of the
venue can have a significant effect on the seriousness with which people take ideas
and conversations, and the creativity of their thinking,
” one user wrote, adding: “I
suspect that meeting in a building constructed in 1480 might help promote
longtermism and multi-century thinking.
”
[See also: Too big to blame: the great Libor cover-up]
ast year William MacAskill published his second popular philosophy book,
What We Owe the Future, which outlined why he had come to believe in long-
termism, the idea that positively influencing the future is a key moral priority of our
time. The book received glowing reviews and MacAskill was, inevitably, profiled by
the New Yorker and Time. He celebrated its publication with a dinner at Eleven
Madison Park, a vegan restaurant in Manhattan with a $438-a-head tasting menu,
hosted by Bankman-Fried.
At the start of his book MacAskill asks the reader to “imagine living, in order of
birth, through the life of every human being who has ever lived”
. Y
ou are the
colonised and the coloniser, the slaveholder and the slave; you will begin 300,000
years ago in Africa and after you have reached the present day you will press on,
inhabiting the lives of humans who are born a thousand, a million or even a trillion
years from now, should mankind one day colonise the stars. He then asks: if you
knew you were going to live all of these lives, what would you want humanity to do
in the present? It struck me, reading this book after FTX imploded, that MacAskill
was calling on readers to transcend their humanity and make moral decisions as if
they were God.
One argument for longtermism is that the suffering caused by an apocalyptic event
would be so enormous that we are morally required to try to avert it, even if the
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possibility of such an event happening is relatively small. In a 2021 paper, MacAskill
suggests that a reasonable estimate for the number of future humans is 10
24
– that’s
1,000,000,000,000,000,000,000,000 people who have not yet been born and to
whom we owe some responsibility. (This is a conservative estimate, MacAskill notes,
because should future generations succeed in creating digitally sentient beings and
colonising the Milky Way, there may be 10
45
future lives.) If an intervention that
reduces the risk of human extinction by 1 per cent is equivalent to saving ten
quadrillion (10
16
) lives, spending money on bed nets suddenly doesn’t seem such a
good moral investment. MacAskill goes on to calculate that, for example, spending
$100 on pandemic preparedness could increase the number of future beings by 200
million, while the same donation to an anti-malaria charity will save only 0.025 lives.
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The Oxford philosopher William MacAskill, a leading figure in the effective altruism movement.
Photo by Matt Crockett
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Critics of this form of longtermism have argued that at best it’s impractical: how can
we possibly know what actions would best improve the lives of people born a
million years from now, or what digital beings living on Mars would want? At worst,
it is sinister, because it diverts funds away from people who are suffering now, in
order to address abstract, distant problems. “Longtermism has the potential to
destroy the effective altruism movement entirely, because by fiddling with the
numbers, the above reasoning can be used to squash funding for any charitable
cause whatsoever,
” wrote Vaden Masrani, a computer scientist, in a blog response to
MacAskill, noting that these estimates about the size of humanity were essentially
“made-up numbers”
. And yet, data analysis by the Economist found that by 2022, 40
per cent of effective altruism’s funding was directed towards longtermist causes.
Much of this money was spent on AI safety, an issue that many EAs argue is more
urgent than climate change. EA’s detractors have noted that the movement’s tech
donors stand to benefit from influencing the conversation around how AI is
developed and regulated. Dustin Moskovitz’s Open Philanthropy was an early
backer of OpenAI, developed to build safe AI that would “benefit all of humanity”
.
Sam Bankman-Fried was one of the largest funders of Anthropic, another leading AI
company that promises to make AI safer. Anthropic was also backed by Moskovitz
and the Skype founder, Jaan Tallinn, a prominent EA donor. Peter Thiel and Elon
Musk, who invested early in OpenAI and DeepMind, have close ties to EA figures
and have both been keynote speakers at EA conferences. (Musk has claimed that
effective altruism is a “close match” for his philosophy.) Asked on the EA forum what
the movement had achieved, one member replied: “[Has] played a substantial role in
founding all three of the top leading AI capability companies (cry emoji).
”
Earlier this year the prominent AI scientist Timnit Gebru described EA as a
“dangerous cult”
, one that discouraged its members from socialising with non-EA
friends and family members, writing on her LinkedIn: “I don’t think people have any
idea how much this cult is driving so much of AI.
” She added that she and others had
received messages from people who attended EA workshops in which they explored
using violence – “such as murder and mail bombs” – to curb AI research. Gebru, who
studies algorithmic bias, argues that by focusing attention on the future, big AI
companies are distracting people from the real harms their technology is already
causing.
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Even before the Bankman-Fried crisis, a movement that once prided itself on an
openness to criticism and debate was closing ranks. When two researchers
published a paper in 2021 criticising EA’s undemocratic approach to existential risk –
arguing, as Gebru does, that the future of humanity should not be decided by a
handful of tech-utopians – they said they were urged by some EAs not to publish, in
case it damaged funding to the cause.
n 10 November 2022, Sam Bankman-Fried tweeted that he had “f ****d up”
. It
was an understatement. The following day, he announced that FTX had filed
for bankruptcy as customers found themselves unable to withdraw their money. The
five-member board of the FTX Future Fund (among them MacAskill) resigned,
saying they were “shocked and immensely saddened” and “deeply regret the
difficult, painful and stressful position” that the fund’s grantees were now in. The
following month, Bankman-Fried was arrested. A week later the British regulator the
Charity Commission opened an investigation into the Effective Ventures
Foundation UK to assess the risk to its assets (it’s possible that FTX money will have
to be returned) and to investigate potential conflicts of interest, as well as the way
the charity was governed.
Recent lawsuits have shed more light on EA’s strange turn. During an action over
Musk’s purchase of Twitter, messages were released showing that MacAskill had
approached Musk offering to set up a meeting with his “collaborator” Bankman-
Fried to discuss buying Twitter together and “then making it better for the world”
.
“Y
ou vouch for him?” Musk asked. “Very much so! Very dedicated to making the
long-term future of humanity go well,
” MacAskill replied, directing Musk to a tweet
announcing the creation of the FTX Future Fund, “in case you want to get a feel for
Sam”
.
[See also: The algorithms quietly stoking inflation]
Y
et in July 2023, a lawsuit filed in a federal bankruptcy court highlighted the
“frequently misguided and sometimes dystopian” projects of Bankman-Fried’s FTX
Foundation (which seeded the FTX Future Fund). The foundation, according to the
complaint submitted to the court, was “a purported charity that served little
purpose other than to enhance the public stature of [the] defendants”
. The filing
pointed to a $300,000 grant given in May 2022 for an individual to write a book “on
how to figure out what humans’ utility function is”
, and a $400,000 grant to a group
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I
that published Y
ouTube videos about EA. The same court document referenced a
memo in which Bankman-Fried’s brother Gabe appeared to discuss plans to
purchase the Pacific island of Nauru, in order to build a “bunker/
shelter” that would
ensure “most EAs survive” an event that wiped out between half and 99.99 per cent
of the global population.
n July I went to see William MacAskill speak at London’s Southbank Centre,
where he – tall and boyish-looking, with a Scottish burr – shared a stage with the
Oxford data scientist Hannah Ritchie and the Y
ouTuber Ali Abdaal, who
moderated. Abdaal asked flattering questions about MacAskill’s generosity, and it
was a while before it was made clear that everyone on stage was sympathetic
towards effective altruism. FTX and Sam Bankman-Fried were not mentioned or
raised in questions from the audience. I sat close to a young woman who laughed
heartily at MacAskill’s jokes and approached me afterwards to ask, with evangelical
keenness, why I was taking notes. She worked for an EA organisation, too, and when
I told her I was a journalist her smile turned rictus.
No one has suggested that senior EAs knew of Bankman-Fried’s fraud, but my
conversations corroborated investigations by Time and the New Yorker suggesting
that MacAskill and others had been repeatedly warned about Bankman-Fried’s
business practices. Some of these warnings date back to 2018, when half the staff of
Alameda Research – a crypto-trading firm co-founded by Bankman-Fried and
staffed almost entirely with EAs – quit, accusing Bankman-Fried of being
“negligent”
, “unethical” and “misreporting numbers”
.
There was a marked lack of curiosity, one former senior EA told me. “When a bunch
of people who are trusted in the community leave and say that [Bankman-Fried is
untrustworthy], if you didn’t investigate that thoroughly you’re being extremely
foolish. And if you did, I think you would have known that there were reasons to at
least be very concerned about the possible blowback of making him the poster boy
of the movement.
”
The former EA observed that earlier in 2022 another crypto billionaire affiliated with
the movement, the British entrepreneur Ben Delo, pleaded guilty before a US court
for failing to implement sufficient anti-money-laundering checks – an incident that
ought to have prompted EA’s leadership to consider the risks of associating with the
super-rich. The leadership’s judgement had been clouded by greed, said the former
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EA: “but a weird kind of greed. It’s greed to have more power and money behind
your ideology – it’s philosopher’s greed.
”
In the aftermath of FTX’s collapse, some EAs wondered why people within the
community had shared stories extolling Bankman-Fried’s frugality – in media
profiles, he was the billionaire who slept on a beanbag, lived in a house share and
drove a Corolla – when so many had visited his $40m penthouse in the Bahamas.
Some former EAs suggested to me that perhaps the disconnect between the legend
and the reality was overlooked because Bankman-Fried spoke the right language: he
was an admirably “hardcore utilitarian”
.
The entrepreneur Lauren Remington Platt (left), Sam Bankman-Fried (centre) and the model
Gisele Bündchen at a crypto festival in the Bahamas, April 2022. Photo by Photo by Joe Schildhorn
/ BFA.com / Shutterstock
In June this year, MacAskill seemed to concede that he had been naive. Writing on
the EA forum, he said: “Looking forward, I’m going to be less likely to infer that, just
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N
because someone has sincere-seeming signals of being highly morally motivated,
like being vegan or demonstrating credible plans to give away most of their wealth,
they will have moral integrity in other ways, too.
” The extent of Bankman-Fried’s
sincerity is unclear: was he reckless because he believed the ends justified the
means, or did he use EA to burnish his reputation? In a Vox interview conducted via
Twitter DMs shortly after FTX collapsed, he suggested the latter: the “ethics stuff ”
was “a dumb game we woke Westerners play where we say all the right shiboleths
[sic] and so everyone likes us”
.
The former EAs I spoke to expressed anger at the movement’s leadership for falling
silent in the aftermath. “Everybody’s fleeing the community and it makes me quite
angry,
” said one, “because these people were all happy to take talent, take status,
while the times were good. And as soon as the times were bad, when they needed to
step up, they decided to get on the first boat.
” They cited MacAskill saying he
shouldn’t be “the face of EA” and Holden Karnofsky, a co-CEO of Open
Philanthropy, writing on forums that EA “isn’t a great brand for wide public
outreach”
.
Another ex-EA told me the movement needed to do more to care for its members.
“There’s a tendency to encourage young, naive people to put themselves in risky
situations, to make a lot of personal and financial sacrifices, and then to provide no
support or safety net. Because suddenly you can be on the out – you can be labelled
as a person who is not that smart, who doesn’t have good judgement, or who
doesn’t have integrity.
” For many, EA is their identity and their social and
professional network, they said. “It means that if it goes wrong, your entire life falls
apart.
” Many people described struggling emotionally after leaving, because it was
hard to shake the mindset, to still derive meaning and self-worth when you are no
longer “maximising good”
.
ow that Bankman-Fried’s trial is over, or when the Charity Commission’s
investigation closes, perhaps William MacAskill will finally say more. It will be
tempting for effective altruism’s defenders to continue to portray Sam Bankman-
Fried as a rogue actor. But it would be more honest to acknowledge the role the
movement played in the crisis, and the risks that come from allowing a few
billionaires to determine how to do the “most good”
. For their community to survive
in a recognisable form, those involved in EA will have to grapple with its politics,
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and find some way to reconcile its anti-poverty idealism and its tendency towards
Silicon Valley millenarianism. No graph or calculation will help them do that.
For now, the steady, determined work of the effective altruists continues – but not
without frustration. “I am tired of having a few people put on pedestals because
they are very smart – or very good at self-promotion,
” one member wrote on the EA
forum this year. “I am tired of being in a position where I have to apologise for
sexism, racism and other toxic ideologies within this movement… I am tired of
billionaires. And I am really, really tired of seeing people publicly defend bad
behaviour as good epistemics.
” A vegan social worker, she had committed to giving
away over 10 per cent of her income. She wanted the world to be “a better, kinder,
softer place”
, she explained, so “I’m not quitting. But I am tired.
”
[See also: The rise of the new tech right]
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Topics in this article : , , , , ,
, ,
This article appears in the 20 Sep 2023 issue of the New Statesman, The Rise and Fall of
the Great Powers
Cryptocurrency Finance Financial crime Magazine Oxford
Philosophy Silicon Valley Technology
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In this section 
WORK CULTURE
FTX's Sam Bankman-Fried believed in 'effective altruism'. What is it?
(Image credit: Alamy)
   
Search
BBC
By Alex Christian 10th October 2023
Thefallencryptobillionaireclaimedtowanttomakeas
muchaspossibletodoasmuchgoodashecould.The
philosophy,'effectivealtruism',iswellintentioned–but
complicated.
n 28 March 2024, all eyes will be on a courtroom in New York City, where former
cryptocurrency billionaire Sam Bankman-Fried will appear to be sentenced after a
November 2023 conviction on seven counts of wire fraud and conspiracy to launder
Work Culture International Business Sustainable Business More 
14.03.2025, 10:23 FTX's Sam Bankman-Fried believed in 'effective altruism'. What is it? - BBC Worklife
https://www.bbc.co.uk/worklife/article/20231009-ftxs-sam-bankman-fried-believed-in-effective-altruism-what-is-it 1/4

O
money. He faces up to 110 years in prison. Now snared in controversy, at its
peak in early 2022, FTX was worth $32bn (£26.3bn). As the exchange went
into freefall, Bankman-Fried funnelled customer deposits into his trading
firm, Alameda Research, to prop up his own risky investments and fund a
lavish lifestyle.
But Bankman-Fried, 32, has said his goal wasn't to enrich his own life through massive
earnings – rather he wanted to do enormous good for billions of people. From his first job
as a quantitative trader, to the founding of his crypto empire, Bankman-Fried has touted
the benefits of the effective altruism movement. In short, he claimed he wanted to make
as much money as possible so he could give it away and change the world for the better.
"Effective altruism is a philosophy that aims to do as much good as possible,"
explains Brian Berkey, associate professor of legal studies and business ethics at The
Wharton School of the University of Pennsylvania, US. "It's how to help ensure people's
time and resources are spent well in making the world a better place. Through empirical
evidence, individuals can make more informed decisions over which charitable causes to
support."
Effective altruism (EA) looks great on paper – but many experts say the philosophy can
ignore the nuances of human behaviour. In some ways, they say Bankman-Fried is the
ultimate cautionary tale of how the lofty goal to do good can quickly go bad.
Higher wages, higher impact
'Effective altruism' emerged in 2009 from the work of Oxford University philosophers
William MacAskill and Toby Ord. Building upon Australian philosopher Peter Singer's
framework for ethical decision-making, the pair sought to establish a data-driven,
utilitarian-esque approach to charity giving, to help maximise the amount of positive
impact a single person could have on the world. They also established Giving What We
Can, whose members pledge to give at least 10% of their income to effective charities.
An early focus of EA, says Berkey, was the movement's collaboration with the Anti Malaria
Foundation to donate money towards mosquito bed nets: a cheap solution to one of Sub-
Saharan Africa's biggest killers. The program generated maximum gains for minimal
costs. "Many resources put to charitable use are often done so inefficiently," he says.
"Directing funds towards an unheralded charity that does 10,000-times as much good as a
popular organisation that receives millions of dollars every year means achieving massive
differences through the same resources."
Sam Bankman-Fried used his platform in part to espouse effective altruism (Credit: Getty
Images)
Soon after, MacAskill co-founded 80,000 Hours, an effective altruism non-profit that
conducts research on which careers have the largest positive social impact. It advocates
for 'earning to give', the philosophy in which people purposely choose careers with higher
earning potential in order to maximise charitable giving.
"When thinking of how to make the world a better place, many people may choose to
work for a charity or in political activism," says Joshua Hobbs, lecturer and consultant in
applied ethics at the University of Leeds, UK. "However, many effective altruists believe
that rather than slog away in a soup kitchen, you can create a greater impact by working
in say, investment banking, earn higher wages and donate greater sums to charity."
This approach stuck with a young, enterprising Bankman-Fried, who met MacAskill in
2013 while he was still a student at the Massachusetts Institute of Technology (MIT).
MacAskill reportedly convinced the prodigious mathematician to maximise his impact by
taking a high-paying finance job and giving his money away.
Bankman-Fried did. After graduating with a physics degree, he joined Wall Street high-
frequency trading firm Jane Street Capital and began donating half his estimated
$300,000 salary to charitable causes that included animal welfare organisations. In 2019,
Bankman-Fried founded FTX, which quickly became one of the biggest cryptocurrency
exchanges in the world. As the company's value climbed into the billions, its charity arm
committed more than $160m to at least 110 non-profits by September 2022, including
biotech start-ups, Covid-19 vaccine research and effective altruist-affiliated groups.
'A good PR win'
Bankman-Fried isn't the only tech billionaire who has backed effective altruism, whether
financially or philosophically: Facebook co-founder Dustin Moskovitz is part of the
community, giving away hundreds of millions of dollars to effective charities. Hobbs says
the movement is a natural partner for Silicon Valley, given its long had a philanthropic
streak – notably the Gates Foundation, which has self-reported charitable donations of
more than $79bn (£64.7bn) since 2000.
"Effective altruism focuses on utility – maximising earning potential and giving huge sums
away – and tech is the sphere of smart graduates who can genuinely earn boundless
incomes," adds Hobbs. "For tech billionaires, effective altruism is a good PR win: it's a
philosophy that says very smart, wealthy individuals are best placed to work out how their
money is best spent, rather than radically redistributing their funds through progressive
taxation."
Hobbs says EA's popularity in the tech industry can sometimes further billionaires'
individual interests instead of the greater good. "The most high-profile effective altruists
tend to be reasonably privileged white men, who aren't necessarily funnelling funds into
political change or addressing power imbalances. It's not necessarily an accident that the
effective-altruist approach has appealed to people like Bankman-Fried."
Manyeffectivealtruistsbelievethatratherthanslogawayin
asoupkitchen,youcancreateagreaterimpactbyworking
insay,investmentbanking,earnhigherwagesanddonate
greatersumstocharity–JoshuaHobbs
Despite criticism, effective altruism has had real results in some cases. By March 2022,
Giving What We Can had raised more than $2.5bn in pledges, with $8.6m donated to the
UK-based Against Malaria Foundation – enough to save approximately 2,000 lives, most
of which are children under the age of five. Funds amounting to $3.7m have gone to
Schistosomiasis Control Initiative and Deworm the World, enough to remove parasitic
worms from 3.7m children.
Yet with its epicentre in places such as Oxford and Silicon Valley, Berkey says that in many
cases, the focus of effective altruism has moved away from using hard evidence to address
humanitarian crises in real time with simple philanthropic solutions. Instead, it has begun
to favour advancing abstract and long-termist views, such as averting AI-driven
catastrophe and nuclear war. "For future-focused tech billionaires, preventing runaway AI
may seem more interesting than transferring huge amounts of wealth to poorer people on
the other side of the world."
Prominent effective altruists, including MacAskill and Moskovitz, have denounced
Bankman-Fried as they try to continue their work. But proponents of EA understand the
implosion of FTX and Bankman-Fried's criminal proceedings have left a scar on the
philosophy. "Either EA encouraged Sam's unethical behavior, or provided a convenient
rationalization for such actions," tweeted Moskovitz in late 2022. "Either is bad."

;
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Berkey, who also considers himself an effective altruist, describes Bankman-Fried as "an
embarrassment". "What he did was terrible – but it wasn't unique or fundamental to
effective altruism," he adds. "There are always people who seek to advance their own
status through corrupt, self-serving and unethical actions while masquerading behind a
large-scale movement advocating for social change."
Although there is power in the philosophy, Hobbs says EA is flawed in that the movement
seeks change through those already in positions of power. "Effective altruism can
underestimate the role of the environment in shaping a person's character and
motivations," he says. "An effective-altruist investment banker still works with investment
bankers who have very different priorities and viewpoints. There was perhaps naivete that
a scenario like Bankman-Fried would never happen."
Indeed, as much as Bankman-Fried's FTX committed to charity, just a month after the
exchange collapsed, it began trying to claw back donations. And, in a Twitter direct-
message exchange with Vox journalist Kelsey Piper, shortly after FTX filed for bankruptcy,
Bankman-Fried agreed his ethically driven approach was "mostly a front". "Some of this
decade's greatest heroes will never be known," he wrote to Piper, "and some of its most
beloved people are basically shams."
   
 S H A R E
Source: Washington Post
Date: August 20, 2024
Opinion
Sam Bankman-Fried, a personal
verdict
A few thoughts on how Americans
thought about the crypto trial of the
century.
By Michael Lewis
August 20, 2024 at 11:00 a.m.
When I first started chasing around after Sam Bankman-
Fried, I had no idea where he might lead me. I certainly
had no sense that I’d wind up with a ringside seat to a
financial catastrophe. I had no slant or angle, much less a
theory of the case. I was just curious about Sam and his
bizarre situation. Inside of three years, he’d gone from
socially and emotionally isolated 25-year-old with an
upper-middle-class bank account to leader of a small
army of math nerds and (according to Forbes magazine)
not merely the world’s richest person under 30 but maybe
the fastest creator of wealth in recorded history. The
leaders of the Republican and Democratic parties solicited
his money and his thoughts. The heads of big Wall Street
banks felt a need to know him, and the leading Silicon
Valley venture capitalists felt a need to invest in him. Tom
Brady was hanging out with him, Taylor Swift was
negotiating to endorse his crypto exchange, Shaquille
O’Neal wanted to partner with him to solve the homeless
problem in the Bahamas, and Orlando Bloom was asking
to play him in a movie. He’d gone from having no friends
as a child to having too many as an adult without ever
developing a capacity for friendship.
It wasn’t clear if there was a story in any of this, or what
the story might be, but I assumed that if I insinuated
myself into the life of Sam Bankman-Fried, something
would happen and a story might reveal itself. And, well,
something happened.
A comedy with a tragic ending: By the time I began
writing the book, that’s what I thought I had on my
hands. I started on the last day of January 2023, or
roughly a month after Sam had been extradited from the
Bahamas to the United States and placed under house
arrest at his parents’ home on the campus of Stanford
University. It was published in hardcover in early October,
the same day jurors were selected for Sam’s trial in a
federal courthouse in Lower Manhattan.
All of this seemed to me just about ideal, at least for my
narrow purposes. By trapping my main character inside a
home an hour from my own, the legal authorities enabled
me access to him that would have been difficult to
replicate in the wild. Publication a day before the trial
opened allowed the book to interact with the event
without interfering with it.
Of course, I didn’t really imagine that the book should
influence the legal outcome. Neither side was particularly
interested in a full and rich account of events, and I was
14.03.2025, 10:23 Classical utilitarians: Sam Bankman-Fried
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uneasy with how both might distort whatever they found
useful for their purposes. But I did like the idea of, in
effect, putting readers in the jury box. The rules of
evidence in narrative nonfiction are looser than in federal
criminal trials.
And I thought that a fuller description of events might
enable a reader to render a verdict more nuanced than
“innocent” or “guilty.” Which isn’t to say that I expected
every reader to render the same verdict. The joy of the
story was that they wouldn’t. It was too messy for that.
The trial was less messy. The two sides actually agreed
upon many important facts. They agreed, for example,
that Alameda Research was consistently profitable in its
day-to-day trading activities. They also agreed that FTX
had been a real business, with revenue that had grown
from roughly $20 million in 2019 to roughly $1 billion in
2021. Also, that when FTX first opened, it was unable to
obtain its own bank accounts and so directed its
customers to wire their deposits into bank accounts
controlled by Alameda Research. (No one explained why
the customers — among them some of the world’s most
sophisticated trading firms — didn’t complain about wiring
the money to the wrong place.) No one disputed that,
right from the start, Alameda Research also had the
ability to borrow effectively unlimited sums from FTX. And
that between these two mechanisms, most of the $15
billion FTX’s customers deposited on the exchange came
to rest inside Sam’s private trading firm. Both sides also
appeared to agree that for an amazingly long time, this
commingling of customer funds with Sam’s didn’t register
with the people who ran FTX and Alameda Research as a
hugely important fact. For most of its life, Alameda
Research held more than enough in liquid assets to cope
with any run on FTX. That is, if all the depositors had
turned up at once and asked for their money back, they
likely could have had it.
The two sides also agreed on when this ceased to be true:
mid-June of 2022. A month-long free fall in crypto prices
had created panic in the market. Alameda Research had
suffered big losses, or rather a reversal of the huge gains
it had made on a bunch of crypto tokens (Solana, Serum,
FTX Token) that Sam had bought for next to nothing.
Elsewhere in cryptoland, investors who had deposited
their crypto in unregulated “banks” (Genesis was the big
one) were pulling their money out. The crypto banks had
loaned roughly $10 billion of that money to Alameda
Research and accepted Sam’s tokens as collateral. In
mid-June, they asked for their money back. By then Sam
had plowed much of the money he’d borrowed into a
weird grab bag of assets: Elon Musk’s SpaceX, the AI
company Anthropic, a bitcoin-mining company, a liquor
company owned by the Kardashians and hundreds of
other private companies. The one trait these assets
shared was an inability to be sold quickly. Lacking its own
funds to repay its crypto lenders, Alameda Research used
the funds belonging to FTX’s customers.
This was obviously bad. Sam and his companies had
crossed one red line back in 2019 when they warehoused
FTX customer deposits inside Alameda Research. They
crossed a much brighter one when they put those
deposits at risk. By late June 2022, had FTX’s customers
all turned up and asked for their money back, FTX
wouldn’t have been able to repay them. Roughly $8 billion
of it was effectively tied up in Sam’s private investments
or in other Alameda Research trades. In effect, Sam
Bankman-Fried had yoked a profitable crypto exchange to
a profitable private trading firm and turned them into a
medium-size bank. The Bank of Sam had several odd
features. It invested in far riskier assets than banks
typically buy. It was totally unregulated. It had no deposit
insurance or other protections usually offered to
customers. And its depositors were unaware of the bank’s
existence.
The issue wasn’t so much what had happened, but how
and why. What had Sam Bankman-Fried known, and
when had he known it? What had Sam Bankman-Fried
intentionally done with his customers’ deposits, and why
had he done it? Here the defense and prosecution parted
ways, never to reunite. Sam’s lawyers sought to persuade
the jury that their perpetually distracted client never
really knew that he had roughly $10 billion of other
people’s money in his own private trading firm — and
that, even if he had realized it, he had a right to invest
the money as he pleased. The federal prosecutors argued
that Sam had known from the start where the money was
and that FTX was a complex criminal scheme cooked up
by a deeply deceitful person to steal it.
There was never any doubt which side had the stronger
case. (Before the trial, Sam put his odds of victory at 10-
1 against.) What little suspense that existed at the start
of the trial vanished after Gary Wang, FTX’s chief
technology officer, testified. Gary started by confessing to
all the crimes the prosecutors wanted him to confess to.
He went on to make it clear that Sam had known all along
that the money was in the wrong place. And then he was
done and gone and replaced by Caroline Ellison, who
finished the prosecution’s job.
Caroline was the trial’s most important witness. She’d
been CEO of Alameda Research. If Sam was not
responsible for what had happened, Caroline arguably
was. And so she also had the most to gain from Sam
being held responsible.
Caroline explained to the jury how the crypto lenders had
asked her for a quick and dirty picture of Alameda
Research’s finances. And how, on June 18, on Sam’s
instructions, she cooked up eight different balance sheets
of varying degrees of dishonesty and presented them to
Sam, who selected the least honest of the bunch to show
his lenders.
“Q. In the course of working with the
defendant, did he talk to you about the ethics
of lying and stealing?
A. Yeah. He said that he was a utilitarian, and
he believed that the ways that people tried to
justify rules like don’t lie and don’t steal
within utilitarianism didn’t work, and he
thought that the only moral rule that
mattered was doing whatever would
maximize utility — so essentially trying to
create the greatest good for the greatest
number of people or beings.”
The prosecutors didn’t need Sam’s help. Sam helped

them anyway by ignoring the counsel of his lawyers and
testifying on his own behalf. When confronted by older
experts in some complicated field in which he had zero
experience, Sam’s first step was always to doubt the
value of their advice and think about the complicated field
on his own. When this approach worked, it really worked.
But after he took the stand, it was clear he had no idea
what he was doing. It seemed he’d somehow decided, for
example, that it was a good idea to respond to the
prosecutors’ questions about his life by not remembering
any of it. Events that any normal person would never
forget — say, whether he’d flown in a private jet to the
2022 Super Bowl or dined with Bill Clinton and the prime
minister of the Bahamas — Sam was suddenly hazy
about.
Real-life Sam Bankman-Fried could be breathtakingly
persuasive. There was a reason so many smart
professional investors and traders entrusted him with
billions of dollars. Witness stand Sam Bankman-Fried was
so incredible that the jury must have wondered how any
idiot ever trusted him with a satoshi. As Lewis Kaplan, the
federal judge who presided over the case, said later:
“When he wasn’t outright lying, he was often evasive,
hairsplitting, dodging questions and trying to get the
prosecutor to reword questions in ways that he could
answer in ways he thought less harmful than a truthful
answer to the question that was posed would have been.
I’ve been doing this job for close to 30 years. I’ve never
seen a performance quite like that.”
The judge spoke those words in his courtroom at Sam’s
sentencing, five months after the trial. The sentencing
was more of a cliffhanger than the trial. Even the kindest
interpretation of what Sam had done left $11 billion or so
of other people’s money being risked without their
consent and $8.7 billion in missing customer deposits.
(The judge deemed inadmissible any evidence that FTX’s
customers might get their money back.) It was difficult to
see any juror voting to do anything but convict. All the
suspense in Sam’s case was in how you felt about it. How
you felt about him.
Back in 1984, an entity called the U.S. Sentencing
Commission established guidelines for all noncapital
crimes. These sound very precise and almost scientific,
but they’re maybe best-loved by judges who would rather
not have to think too hard about a case. Judge Kaplan
clearly loved thinking about Sam’s case and began by
tossing the guidelines out the courtroom window. After
that, he could do whatever he felt like doing, short of
sentencing Sam to death. He could let him off with time
served. He could also put him away for life. And his
decision about what to do with Sam was going to reflect
how he felt about him.
And so on that morning of March 28, 2024, the judge
ordered Sam to rise so that he might address him
directly. Two hours or so earlier, Sam had shuffled into the
courtroom in prison khakis with his head down and his
hands oddly clasped behind his back. Just before he’d
entered, his guards had told him he was meant to be
wearing handcuffs and asked if he could create the
impression that he was doing so. It was very SBF, this:
for the authorities to realize he should be constrained, but
too late, and for Sam to meekly and pointlessly comply.
Now, with his hands in front of him, Sam rose to listen to
his fate.
Picking and choosing from the thousands of pages of trial
testimony, Judge Kaplan then told the story of Sam
Bankman-Fried. The exercise wasn’t very different from
what I had done to write a book about Sam Bankman-
Fried. Of course, I had a lot more material to work with.
I’d seen much of what had gone down with my own eyes
and interviewed all the main characters, along with scores
of extras, over and again, in good times and bad. The
judge had to go on mainly what he’d heard in the
courtroom.
He opened with Sam’s childhood. The judge’s interest in
the subject was different from mine. I was mainly
interested in how socially isolated and peculiar Sam had
been as a child; the judge was mainly interested in how
many privileges Sam had enjoyed. But then he added
this:
“And he suffers from autism, which is a condition that
affects different afflicted persons very differently,
frequently. He, I gather, is what one would call a very
high-achieving autistic person, which means, among
other things, that he’s capable of huge accomplishments,
and he has frequently a social awkwardness and a way of
interacting with people that’s unusual and sometimes off-
putting. I take that all as a given.”
I’d left it to the reader to figure out what spectrum, if any,
Sam was on. I’m still unsure. He exhibited some unusual
mannerisms. His knee bounced and his eyes darted
around when he spoke, and unless he got lucky and
stumbled into a wholly absorbing topic, he seemed always
to be thinking about three things at once. But he’d only
been diagnosed with autism, in a bid for sympathy, in the
summer of 2023. And he had qualities — a deep sense of
irony, for example — not typically associated with the
diagnosis. I imagine that one day, when the human brain
is better understood, someone might revisit Sam’s case
and say, “I can see why they thought he was autistic, but
this is what it actually was.”
At any rate, as the judge proceeded it became clear that
he thought that whatever afflicted Sam was beside the
point. The point was that Sam had broken the law, caused
a lot of pain, failed to express remorse and perjured
himself in the bargain. Sam’s motive, the judge decided,
wasn’t the usual desire for money. “He did it because he
wanted to be a hugely, hugely politically influential person
in this country,” he said. Before handing Sam his
sentence, he dwelled for a moment on the deeper why of
the case. He said he’d realized something important while
listening to Caroline Ellison testify. Then he picked up the
transcript of her testimony and read:
“Q. During your time working with the
defendant, how, if at all, did he describe his
approach to risk-taking? A. He described
himself as truly risk-neutral, meaning that
most people are risk-averse, meaning that
they would rather not take a risk if they don’t
have to, or they try to avoid risks. But he said
that he was totally comfortable taking a risk
as long as he thought it was a positive EV.

Q. What do you mean by “positive EV”?
A. “EV” stands for “expected value,” so that
was a term that we used a lot when talking
about trading. So, yeah, positive EV just
means that sort of, on average, you expect it
to pay off well, even if maybe there are lots
of cases where you will end up with zero, or
you’ll end up losing lots of money, because
there are, like, some cases where you make a
lot of money.
Q. Did the defendant ever give any example
to describe his approach to risk-taking?
A. Yeah. He talked about being willing to take
large coin flips, like a coin flip where if it
comes up tails, you might lose $10 million.
But if it comes up heads, you make slightly
more than $10 million.
Q. Did he ever give other coin-flip examples?
A. Yeah. I guess he also talked about this in
the context of thinking about what was good
for the world, saying that he would be happy
to flip a coin if it came up tails and the world
was destroyed — as long as if it came up
heads, the world would be, like, more than
twice as good.”
“In other words,” said the judge, “a man willing to flip a
coin as to the continued existence of life and civilization
on Earth, if the chances were imperceptibly greater that it
would come out without that catastrophic outcome, that’s
really a leitmotif in my judgment of this entire case. … It’s
his nature.” Because it was his nature, the judge
concluded, Sam would, if given the chance, do something
like what he had just done all over again. “There is a risk
that this man will be in a position to do something very
bad in the future, and it’s not a trivial risk, not a trivial
risk at all,” said the judge. “So, in part, my sentence will
be for the purpose of disabling him.” He then sentenced
Sam to 25 years in prison, with no possibility of parole.
A few minutes later, Sam dutifully clasped his hands
behind his back and shuffled out of the courtroom.
The mind has a gift for cleansing the past of uncertainty.
However unlikely what just happened might have been —
however contingent on luck and unhappy accident — it
can eventually be made to feel as if it had been always
inevitable. A story gets told that makes some event no
one had forecast feel as if it were entirely predictable.
This purging from reality of lots of messy facts began the
moment FTX collapsed. By the time of Sam’s trial, the
government was able to sell ideas about him that would
have struck any of his closest colleagues as preposterous.
The suggestion, for example, that everything about Sam’s
appearance had been carefully curated to trick people.
The government used Caroline Ellison’s testimony to push
this line:
“Q. How would you describe the defendant’s
personal appearance throughout 2022? What,
if anything, did he tell you about that?
A. He said he thought his hair had been very
valuable. He said ever since Jane Street, he
thought he had gotten higher bonuses
because of his hair and that it was an
important part of FTX’s narrative and image.”
If Sam Bankman-Fried’s appearance was an act, it was an
act he’d performed his entire life. Former schoolmates
who came upon Sam after he’d become a billionaire took
one look at him and said, “Same guy.” His “look” couldn’t
have been more sincere. He was as good as born with an
indifference not just to his own appearance but to other
people’s, too — and to art, nature and almost every
source of beauty that in most people triggers an
emotional response. At some point after he became a
public figure — a thing he’d never expected to be — he no
doubt noticed that other people seemed to be charmed by
his look. His realization would have relieved him of any
pressure to alter his appearance. But that’s different from
creating a persona to deceive others. It’s more like
ChatGPT-4o realizing that the way it just answered a
question caused humans to laugh — and thus must be a
joke.
The effect of the trial was to confine Sam Bankman-Fried
to yet another box on a shelf next to identical boxes
marked “fraud” and deter anyone from taking an honest
interest in him. But even after the trial, I still found him
interesting. There were lots of messy bits about his case
that made it hard to squeeze into any of the usual boxes.
For example: If he knew he’d orchestrated a giant fraud,
why had he devoted so much time and energy to
persuading U.S. financial regulators to regulate him? Why
hadn’t Sam squirreled away a pile of money in some
secret account for himself? Why hadn’t he followed every
other shady crypto dude and fled to Dubai? The answers
to these questions were irrelevant to his legal fate. They
just cluttered the neat picture lots of people seemed to
want to paint of him.
The most obvious bit that didn’t fit into the picture
surfaced a few weeks after his sentencing. On May 7,
2024, John Ray, FTX’s new CEO, revealed to the U.S.
Bankruptcy Court for the District of Delaware that,
against the $8.7 billion in missing customer deposits, FTX
was now sitting on something like $14.5 to $16.3 billion.
Whatever the exact sum, it was enough to repay all
depositors and various other creditors at least 118 cents
on the dollar — that is, everyone who imagined they had
lost money back in November 2022 would get their
money back, with interest. After paying off FTX’s debts —
and paying themselves at least half a billion dollars — Ray
and his team will likely still be sitting on billions of dollars.
How many billions of dollars is still an open question, but
very few of these dollars can be the result of Ray’s
various lawsuits to claw back money paid out by FTX in
good times. The money came almost entirely from a fire
sale of the contents of Sam Bankman-Fried’s dragon’s lair.
The success of the bankruptcy clearly surprised, and
maybe even alarmed, the lawyers running it. Months after
Sam Bankman-Fried handed him the company, Ray had
been keen to stress how little of value he’d been given.
More than a little bizarrely, he talked down the value of
the assets he was meant to dispose of to repay creditors.
Ray called the 20 percent stake Sam had acquired in
Anthropic “worthless.” The giant pile of Solana tokens

Sam had acquired for pennies were “shitcoins” whose
value had been falsely inflated by Sam’s purchases. The
Anthropic stake has wound up being worth billions. The
Solana token, even without Alameda Research around to
prop it up, popped back up from roughly $10 at the end
of 2022 to $150 a year and a half later. To this day, Ray
hasn’t spoken to Sam Bankman-Fried. It’s hard not to
wonder, if they had simply called Sam, what else the
lawyers running the FTX bankruptcy might have learned
about the contents of his lair. Also, how much more
money would be on hand if, for their first 18 months on
the job, the bankruptcy lawyers had simply not shown up
for work.
From the moment Sam Bankman-Fried’s empire
collapsed, lots of people were obviously angry with him,
and others found a ready market in the stoking of
outrage. It was a decent rule of thumb that the people
who got worked up in public about Sam Bankman-Fried
were vulnerable to questions about their own behavior:
owners of crypto exchanges, squirrelly financial people,
dubious crypto Twitter journalists. If you had asked these
people in late November 2022 why they were so angry,
they would likely have said something like, “He stole
people’s money.” If you had further asked them if they
would feel any less angry if that money were repaid, with
interest, a lot of these people would have said something
like: “First, that’s nonsense. Claims on FTX are trading at
3 cents on the dollar. No way people are getting their
money back. But if in some strange alternate universe all
the money and more were found, well, of course I’d feel a
bit differently. How could I not?” All the money and more
has been found, and it’s not clear whether the people who
were most outraged at the outset feel differently. The
people who have made a living selling into the outrage
don’t seem much affected.
One strange fact: No one guessed Sam’s crime before the
market exposed it. Of course, there were plenty of people
willing to say that there was something fishy about the
relationship between FTX and Alameda Research. That
doesn’t count, especially in crypto, where the best guess
is always that something fishy is going on. No one — not
one single person — said, “He’s got the customers’
deposits in his private trading firm.” There is a reason for
this, I think: The crime made no sense. It still makes no
sense. The crime was unnecessary to the business in a
way that, say, Bernie Madoff’s was not (which is why
people guessed Madoff’s crime before it was exposed). A
corollary to this point is that there are many ways it
might have been avoided and FTX might have survived.
The most obvious of these came in June 2022, when the
crypto banks that lent roughly $10 billion to Alameda
Research asked for their money back. If someone had
called them at that moment and said something like,
“Sorry, Sam used your money to make billions of dollars’
worth of illiquid venture capital investments; you can
either wait for us to sell what he bought or sue us — but
if you sue us, you are less likely to get your money back,”
Alameda Research possibly fails, but FTX survives, and
the customers’ money is never in jeopardy.
That doesn’t mean I think that Sam Bankman-Fried is
innocent. It merely informs how I feel about him. I think
the truth is closer to “young person with an intellectually
defensible but socially unacceptable moral code makes a
huge mistake in trying to live by it” than “criminal on the
loose in the financial system.” A lot of what I’ve written
about is nearly as much an indictment of regulators and
venture capitalists and crypto culture and the wider world
that instantly gathers around huge piles of money without
asking too many questions as it is of the founders of FTX.
Sam was always encouraged to think of himself as special
— first by his parents and finally by Jane Street, the
trading firm where he got his start. He took that thought
and ran with it. The situation was complicated by the fact
that he was special. His interactions with the world were
invariably peculiar. These interactions, odd as they might
be, often generated teachable moments. They told you
something about the way the world works. But they also
exposed his most unsettling trait: a willingness to subject
others to risk without their permission. It expressed itself
most obviously in his willingness to gamble with his
customers’ deposits. But it’s also what allowed him to
believe that it would be smart for him to flip a coin that
might wipe out life on Earth.
His crime was of a piece with his character. The character
wasn’t the character of a thief. It was the character of a
person numb to risk. Unable to feel risk himself, he can’t
really imagine other people feeling much at all about the
risk he has subjected them to. It’s this absence in him
that leads him, when cast in a certain light, to seem
vulnerable. Easy to kidnap, easy to steal from. It’s this
absence that, cast in a different light, makes him seem
like a danger to society. I could be wrong: Mine is just
one more theory of a case complicated enough to support
many theories. And even if I’m right, it’s no excuse. In
the end, some coins should never be flipped.
Home
Going Infinite
Sam Bankman-Fried

Effective Altruism After Sam Bankman-Fried
March 13, 2024
By Kieran Dearden
Effective Altruism (EA) is, effectively, the idea that if someone seeks to improve the world, it is rational to do so in the most efficient
and effective ways possible. The methodology typically distills down to comparisons of units, outcomes, and costs, with effective
altruists seeking the most cost- or work-efficient ways of increasing the relative well-being of individuals [1]. A straightforward
example is the comparison between mosquito nets and chemotherapy: if it takes $3500 to prevent an individual from dying of
malaria by supplying mosquito nets, and $8000 to prevent another individual from dying of cancer by administering chemotherapy,
all other things being equal, the effective altruist will invest in mosquito nets and not chemotherapy.
The other major component of effective altruism entails the consideration of cost-efficiency over time [2], where one must weigh up
the benefits of being altruistic now or hold off for greater gains in the future. For example, one could donate $10,000 per year for ten
years to an effective charity, or invest that same amount into an index fund, wait ten years, and donate $110,000 instead (inflation
notwithstanding). All else being equal, the effective altruist chooses to invest and wait, as the effectiveness of the same resources is
greater if one saves instead of spends.
These values draw philanthropists like Sam Bankman-Fried, possibly the most (in)famous of its adherents, to effective altruism.
Managing the cost-efficiency of a resource over time and jumping on effective investments when they arise is philanthropic bread
and butter. The reader will not be surprised there are several considerations and concerns that arise within effective altruism. Many
explain how Sam Bankman-Fried (henceforth SBF) maintained his status within the community of altruists despite being the least
altruistic member of the group [3], and how his actions around the FTX fraud were in part justified by these considerations, despite
being denounced by the Effective Altruism community after FTX filed for bankruptcy [4].
Commitments of Effective Altruism
14.03.2025, 10:23 Effective Altruism After Sam Bankman-Fried - Seven Pillars Institute
https://mail.sevenpillarsinstitute.org/effective-altruism-after-sam-bankman-fried/ 1/8
William MacAskill, an Associate Professor at the University of Oxford and one of the key founders of the effective altruism movement,
proposes effective altruism as being “the project of using evidence and reason to try to find out how to do the most good, and on this
basis trying to do the most good” [1]. This outline is what organizations like GiveWell and Giving What We Can (both founded by
prominent EA members) use to direct their efforts. By analyzing other charities and projects through evidence- and reason-based
methods, such as randomized controlled trials and regression analyses [5], these organizations seek to establish a list of charities
and projects doing the most good empirically. On this basis, EA members decide to try to do the most good, by investing in these
select charities and projects.
Given that philanthropic donations to charities reached over $200 billion as of 2015 [6], and the stakes at play are human lives, it
should be uncontroversial to employ evidence- and reason-based evaluations of these charities and their methods [5]. There are
concerns about the limitations of these methods [7]. But the idea we should be efficient with physical resources, and the best way is
through empirical means, is difficult to argue against. A failure to be efficient with resources directly results in fewer people being
aided by these projects, and thus more people remaining blind, starving, or dying.
Breakdown of Effective Altruism
1. Effective Altruism is a Movement, not a Normative Theory
While Effective Altruism focuses on being altruistic and promoting the “most good”, it is not a normative theory: it does not prescribe
actions, traits, or values that someone ought to follow. Instead, EA is a movement or project, with the aim of trying to do the most
good through whatever actions are required, guided by any trait or value the person involved holds to be good. MacAskill himself
considers Effective Altruism to be tentatively welfarist, as the good it aims to achieve is in the form of an increase in well-being for the
people affected by EA’s actions and investments [1]. MacAskill does acknowledge that other conceptions of the good are compatible
with EA. Yet non-welfarist views of the good are a small minority within the EA community [8] and are not prominent among EA
leaders, making the movement predominantly welfarist, even if it does not specifically prescribe welfarist actions or values.
With this focus on welfare, effective outcomes, and the most good, effective altruism appears to be utilitarian in nature. Both the
effective altruist and the utilitarian agree that saving two lives over one for the same resources would bring about the most good, not
because of the virtuous or deontological motivations, but because the consequences of the actions lead to a better outcome.
However, it is here where effective altruism’s status as a movement and not a normative moral theory becomes evident. MacAskill
specifically states the movement as not being utilitarian [1], meaning that effective altruists are not committed to pursuing the
greatest amount of good for the greatest number of people, but to providing the most effective aid they can for the resources they
are willing to provide. The primary difference between these views is that, as a normative ethic, utilitarianism demands
we ought to always seek the actions and outcomes that result in the greatest amount of good for the greatest number of people. The
effective altruist is only committed to the common-sense view that if one were to donate, it is better to do so efficiently rather than
inefficiently.
The most recent demographic survey found that the Effective Altruism movement is 76%
white, less than 1% Black, 2% Hispanic, and 0% Indigenous, and 71% male.
This lack of normative pressure helps effective altruists avoid one of utilitarianism’s main criticisms: that of being unrealistically
demanding of its adherents. Yet the lack of normative pressure also means there is no real motivation to donate to a charity for an
EA member. If they do choose to donate, they need to simply remember it’s better to donate efficiently. As the Effective Altruism
movement allows for multiple conceptions of the good, it cannot prescribe any charity or organization that one ought to donate to.
The movement recommends of the organizations and charities pursuing some said goal, a particular organization that achieves the
goal most efficiently. The decision and pressure to donate, to actually do the most good, remains with the individual members and
their own values. (The most recent demographic survey found that the Effective Altruism movement is 76% white, less than 1% Black,
2% Hispanic, and 0% Indigenous, and 71% male.)
As the decision to donate lies with the individual, and as it may be considered efficient to let wealth accrue more wealth to donate
more, Bankman-Fried’s comparative lack of altruistic donations does little to invalidate his membership of the movement. Before the
FTX crash, SBF claimed he would eventually be able to donate at least 900 times what he had already given, which was at the time
$25 million, or 0.1% of his fortune [3]. To put this into perspective, Giving What We Can, MacAskill’s meta-charity organization, whose
members are encouraged to donate at least 10% of their income, raised a total of $1.5 billion from 3500 members [2]. Had SBF
managed to keep his promise of a 900-fold increase, he alone would have donated $22.5 billion. In the face of such potential long-
term generosity, SBF faced little criticism from the EA community for donating far less than he could have initially afforded. Had the
$25 million he did donate go to ineffective charities or organizations, he would have faced at least some criticism, as there is still
pressure within the group to donate effectively, if not necessarily to donate.

2. Longtermism and the Drowning Child
MacAskill raises several arguments when considering where and when to donate as an effective altruist [2], including a general
reduction of cost-efficient solutions, expected cost-efficiency over time, social and financial investment returns, and whether we
ought to value present generations over future ones. Using the relative strength of each factor, MacAskill constructs a framework for
determining whether one ought to contribute now or later, given a set of inputs. However, he specifically states that valuing the
interests of people alive today over the potential interests of potential people in the future would not be to treat all individual’s
interests equally [2].
This notion stems from Peter Singer, a long-standing utilitarian and original advocator for the practice of earning to give [9], who
served as the original inspiration for Effective Altruism, and still advocates for many of the movement’s short- and medium-term
goals. He argued the relative distance between you and someone whose suffering you could alleviate ought not have moral weight.
Your moral obligation to save a drowning child right in front of you is no stronger than the moral obligation to save a drowning child a
house, block, or city away (provided you knew of them and could rescue them) [9]. Singer extends the argument to the alleviation of
suffering of people in other countries, as instant communication and swift transportation eliminate many of the issues around the
requirements of knowledge and the capacity to aid, and the jump in distance from city to country is not morally relevant. Thus, there
is no moral reason to value the interests of the child drowning in front of you over the child drowning a country away, only practical
issues. Similarly, MacAskill argues the distance in time between the child drowning in front of you today and the child drowning in
front of you in a week’s time is not a moral consideration; claiming you would save one but not the other is to hold the interests of
one individual over the interests of another, with the only justification stemming from a distance in time [2]. Thus, to spend resources
now to save a single drowning child today, instead of conserving those resources for an opportunity to save two drowning children
tomorrow, is to hold the interests of one individual over the interests of two future individuals. Were the two children to be drowning
today instead of tomorrow, it would be morally irresponsible to save the first drowning child instead.
The equal consideration of individual interests across time leads to some very unintuitive conclusions. If we ought to value the
interests of individuals regardless of how far in the future they are, then it follows that we ought to value the interests of a present
individual the same as an individual half a million years in the future [10]. This view is known as ‘longtermism’, and, while it may seem
absurd, MacAskill, Toby Ord, and SBF endorsed this longtermist view and its concerns [11]. This endorsement from prominent EA
members in positions of power resulted in a significant deviation of the focus of the EA movement from a mixture of present and
near-future donations and commitments to almost purely long-term future concerns [12]. Even after details of the FTX fraud case
arose, causing a large portion of the EA movement to turn against SBF [10], longtermism’s validity was unharmed. Most of the blame
fell on SBF’s deception [13] or how those involved entirely abandoned the principles of the Effective Altruism community [4],
cordoning off the FTX case as an issue with SBF, not EA or longtermism.
These long-term concerns are mostly in the form of “x-risks” [12], or existential risks, the risk that some event will threaten the
existence of humanity at some point in the future. As those holding a longtermist position value the interests of individuals in the
future with the same moral weight as present individuals, any potential existential risk threatens the interests of not just those
present during this event, but all those who come after. MacAskill proposes the Earth could host 10 quadrillion people over the next
billion years [1], thus, were any event to threaten the extinction of humanity at any time during these billion years, such an event
would threaten the well-being of 10 quadrillion people. With so many lives on the line, almost any investment towards averting any
existential risk, no matter how low the probability of such an event occurring, is likely to be more cost-effective than any aid program
dealing with present issues.
$1 billion spent for a 0.001% absolute reduction in existential risk would still, under his most
conservative estimate, be 4,000 times more cost-efficient than bed-net distribution.
This conclusion logically leads to diverting funding from known, cost-effective aid programs like the Against Malaria Foundation (AMF)
to initiatives targeting climate change, pandemic-preparedness, nuclear risks, and artificial intelligence [12]. One concrete example of
this longtermist viewpoint is the $5.2 million donated by OpenPhil, a philanthropic organization formed by GiveWell and substantial
funder of EA projects, to ESPR, a European organization that acts as a pipeline for teenagers to focus on AI safety [12,14,15]. For the
same cost, nearly 1500 people could have been protected against malaria, instead of sending a bunch of teenagers on a summer
camp with the hope that doing so will in some way avert extinction via artificial intelligence. However, this investment is justified by
longtermism, as $5.2 million spent to save 10 quadrillion lives is thousands of times more cost-efficient than the $3500 for bed-nets
could ever be. MacAskill is clearly aware of this tradeoff, stating that engaging in activities that slightly reduce the possibility of some
existential risk may do more good than some activity that saves a thousand lives today [1].
Making an even more direct and striking comparison, MacAskill claims that $1 billion spent for a 0.001% absolute reduction in
existential risk would still, under his most conservative estimate, be 4,000 times more cost-efficient than bed-net distribution [16].
Using these calculations, it becomes clear that nearly any investment of any size with any chance of reducing the risk of extinction by
any degree is justified under longtermism. This inference has led to a variety of investments by EA-affiliated organizations, all seeking
to reduce the possibility of x-risks by any means. These investments range from therapy and productivity support [17] to personal
assistants and SAD lamps [18], all funded by the EA movement, and targeted specifically at those within the movement working on
these problems.
Singer initially acknowledged x-risks as legitimate concerns and agreed that potential future generations are equally considerable to
present generations [19]. Yet eight years later, he would warn against longtermism and existential risk shrinking the moral value of
current issues to almost nothing, while providing a rationale for doing almost anything to avert long-term existential risks [20]. Singer
likened this rationale to that of the Soviets and Nazis, who sought to change and control the long-term future of humanity, using the
potential future gains to justify immoral acts in the present. He also indirectly likens himself to Marx, whose initial vision was used and
twisted to justify a position that could never be contemplated in the vision’s original form [20]. Thus, while Singer is a prominent
member of the EA movement, he is far from a supporter of the longtermist direction of the movement.
Despite Singer’s concerns, Sam Bankman-Fried, a noted endorser of longtermist ideas [11], along with MacAskill and four other EA
leaders, established the FTX Future Fund, which leveraged profits from FTX to fund future-focused EA projects like Rethink and
Nonlinear for at least $100 million to $1 billion. Had FTX not crashed six months after the founding of this fund, a great deal more
money would have been dedicated to these longtermist causes under the same questionable justifications.
Conflict and Contradiction Within the EA Movement
This apparent jump from near-term to long-term issues and the possible incompatibility between near-term, outward-facing projects
like AMF and long-term, inward-facing projects like ESPR, makes it unclear what Effective Altruism is meant to be about. If EA was a
normative moral theory, then this disparity would necessarily need to be resolved, either by concessions or by splitting the theory
into two cogent forms. However, EA is a movement, with specific leaders, dozens of directly related organizations, and billions in
potential and actualized funds [2]. The movement relies on attracting new members and investors. Notably, most new members are
drawn to EA due to its near-term projects and apparent focus on effectiveness. In contrast, the leaders and major contributors are
focused on long-term projects and existential concerns. This results in what the Centre for Effective Altruism themselves refer to as
the funnel model [21] (figure 1).
Figure 1: EA’s Funnel Model (Source: Center for Effective Altruism)

In this model, the public-facing side of EA concentrates on the near-term, tangible projects like bed-nets and eye surgeries to
increase membership numbers and available funding. Select members are then funneled down towards the core of the movement
that focuses on the less tangible longtermist issues. [21]
Public-facing/Grassroots EA (Audience, Followers, Participants)
Main focus is effective giving à la Peter Singer (GWWC, TLYCS, GiveWell)
Main cause area is global health and development targeting the ‘distant poor’ in
developing countries (AMF, SCI, GiveDirectly)
Some focus on (mainstream) animal welfare (factory farming, promoting veg*nism)
Some interest in (mainstream) x-risk/longtermism (climate change, pandemics,
nuclear risks)
Donors support organizations doing direct anti-poverty work (e.g. AMF, SCI,
GiveDirectly)
Core/Highly-Engaged EA (Contributors, Core)
Main focus is x-risk/‘longtermism’ à la Nick Bostrom, Nick Beckstead, and Eliezer
Yudkowsky (FHI, GPI, 80K, MIRI, EA Foundation/CLR)
Main cause areas are x- risk, AI-safety, biotechnology, ‘global priorities research’,
and EA movement-building
More focus on wild animal suffering a la David Pearce, insect suffering, welfare of
digital minds (‘suffering subroutines’), in addition to mainstream animal welfare
Donors support highly-engaged EAs to build career capital, boost their
productivity, and/or start new EA organizations; research; policy-making/agenda-setting. [12]
This explicit division raises questions, both internally and externally, around how EA ought to operate, how it is structured, and what it
truly stands for. This method of drawing people in with one palatable cause, then gradually shifting focus to a far more controversial
cause is likened to bait-and-switch or indoctrination, and the knowledge and belief hierarchy likened to that of a conspiracy or church
[22,23]. Others are concerned these inward-facing investments, like personal assistants, global retreats, and property investments,
are no longer altruistic in nature, instead funding a cushy lifestyle for core EA members, and whether the movement should even be
called Effective Altruism at all [24,25,26]. MacAskill condemned SBF for deceiving others following the FTX fraud case [4]. Yet the
deliberate obfuscation of ‘core’ EA values for fear of driving away support certainly seems like deception on the part of EA.
While questionable whether some inward-focused longtermist investments are truly altruistic, they are, at least in theory, justified by
possible lives saved. Critically, it is unclear just how effective the longtermist Effective Altruism projects truly are. One of the key
public-facing draws to EA is its use of evidence and reason to determine the most effective donation opportunities [1], as opposed to
making emotional- or political-driven donations. Yet both Holden Karnofsky (co-founder of GiveWell) and Ben Todd (co-founder of
80,000 Hours) have expressly stated they do not think the best way to be altruistic is necessarily through evidence and reason
[27,28]. This stance directly contradicts the public-facing EA values but is necessary to justify a significant portion of longtermist
funding. When considering the impacts of welfare projects targeting people half a million years in the future, evidence-based
methodologies have next to nothing to work with. Philosophical reasoning allows longtermism to value these future individuals to the
same degree as present individuals but cannot possibly evaluate the needs or capabilities of time-distant people beyond binary
states of life and death. No reasonable amount of present evidence would be sufficient to establish the need or relative cost-
efficiency of bed-nets at such a distant point in the future, for example. This means that, while EA can utilize evidence and reason to
justify the effectiveness of specific present and near-term interventions, the only claims the movement can make for long-term
welfare issues are those of sweeping generalities, i.e., that these people’s lives matter, and it would be altruistic to save them. The
only identifiable threats to the welfare of future individuals at this timescale are those of mass extinction, as there are too many
unknown factors to determine any narrower specifics. Thus, EA cannot rely on evidence-based methodologies like random controlled
trials to evaluate the effectiveness of longtermist interventions but must instead rely on broad estimates of possible values, betting
upon 0.001% chances and leveraging the potential existence of 10 quadrillion people to justify the hiring of personal assistants.
The Enemy Within Effective Altruism
While the public-facing values of Effective Altruism are appealing, and the near-term benefits of select EA projects are genuinely
transformative (AMF have reportedly protected nearly half a billion people from malaria [29]), the core of EA is undeniably
longtermist. The internal structure of the movement funnels individuals from these public-facing values to longtermist values, and in
doing so, funnels funding from near-term benefits to long-term concerns. Due to the absurdity of the numbers involved in
longtermism, almost any investment towards averting an existential risk by any degree is justified, leading to investments that are
incompatible with EA’s public-facing values. SBF’s comparative lack of altruistic donations and his handling of FTX are similarly
incompatible with EA’s public-facing values, but they are justifiable under a (consequentialist) longtermist view. The Effective Altruism
movement may well provide immediate, tangible, and legitimate benefits to a variety of welfare projects, with GiveWell alone donating
$127 million to non-longtermist charities [30]. The direction, future, and legitimacy of the movement becomes questionable the
further it slides towards longtermism, or, more accurately, the greater the movements longtermist roots become exposed.
Appendix 1: Prominent Effective Altruism members/leaders:
Peter Singer (Original inspiration for the EA movement, founder of The Life You Can Save)
Holden Karnofsky (Co-founder of Givewell, CEO of Open Philanthropy)
Elie Hassenfeld (Co-founder of Givewell)
Toby Ord (Founder/Co-founder of Giving What We Can, Co-founder of the Centre for Effective Altruism)
William MacAskill (Co-founder of Giving What We Can, 80,000 Hours, and the Centre for Effective Altruism)
Nick Beckstead (Co-founder of the Centre for Effective Altruism)
Michelle Hutchinson (Co-founder of the Centre for Effective Altruism)
Benjamin Todd (Co-founder of 80,000 Hours)
Dustin Moskovitz (Co-founder of Good Ventures and Open Philanthropy)
Cari Tuna (Co-founder of Good Ventures and Open Philanthropy)
Sam Bankman-Fried (Director of Development for the Centre for Effective Altruism, primary funder of the FTX Future Fund)
Works Cited:
1. MacAskill, William, and Theron Pummer. “Effective Altruism.” The International Encyclopedia of Ethics, edited by Hugh
LaFollette, 1st ed., Wiley, 2020, pp. 1–9. DOI.org (Crossref), https://doi.org/10.1002/9781444367072.wbiee883.
2. MacAskill, William. “The Definition of Effective Altruism.” Effective Altruism: Philosophical Issues, edited by Hilary Greaves and
Theron Pummer, Oxford University Press, 2019, pp. 3-17. https://doi.org/10.1093/oso/9780198841364.003.0001
3. Erlich, Steven, and Peterson-Withorn, Chase. “Meet the World’s Richest 29-Year-Old: How Sam Bankman-Fried Made A
Record Fortune In The Crypto Frenzy.” Forbes, Oct. 2021. https://www.forbes.com/sites/stevenehrlich/2021/10/06/the-richest-
under-30-in-the-world-all-thanks-to-crypto/?sh=51883a5c3f4d.
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of Economic Research, Sep. 2016. http://www.nber.org/papers/w22595.
8. Berkey, Brian. “The Philosophical Core of Effective Altruism.” Journal of Social Philosophy, vol. 52, no. 1, Mar. 2021, pp. 92–
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JSTOR, http://www.jstor.org/stable/2265052.
10. Englehardt, Elaine E. and Philosophy Documentation Center. “The Duel between Effective Altruism and Greed.” Teaching
Ethics, vol. 23, no. 1, 2023, pp. 1–14. DOI.org (Crossref), https://doi.org/10.5840/tej2023823135.
11. Lewis-Kraus, Gideon. “The Reluctant Prophet of Effective Altruism.” The New Yorker, Aug.
2022. https://www.newyorker.com/magazine/2022/08/15/the-reluctant-prophet-of-effective-altruism
12. Gleiberman, Mollie. “Effective Altruism and the Strategic Ambiguity of ‘Doing Good’.” University of Antwerp, Apr.
2023. https://medialibrary.uantwerpen.be/files/8518/0e580e13-0ea2-4c3f-bb2e-1b8e27c93628.pdf.
13. Beckstead, Nick, et al. “The FTX Future Fund team has resigned.” Nov.
2022. https://forum.effectivealtruism.org/posts/xafpj3on76uRDoBja/the-ftx-future-fund-team-has-resigned-1. Accessed
16/2/2024.
14. Open Philanthropy. “Grant – European Summer Program on Rationality (ESPR), General Support ($510,000).” Jul.
2019. https://www.openphilanthropy.org/grants/european-summer-program-on-rationality-general-support/.
15. Open Philanthropy. “Grant – European Summer Program on Rationality (ESPR), General Support ($4,715,000).” May
2022. https://www.openphilanthropy.org/grants/european-summer-program-on-rationality-general-support-2022/.
16. Greaves, Hilary, and William MacAskill. “The Case for Strong Longtermism.” Global Priorities Institute, Jun.
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within-the?commentId=Nx5H6picuMFtvpxCe. Accessed 20/2/2024.
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and?commentId=FtdYrpmLfaEdF5ekx. Accessed 20/2/2024.

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FUTURE PERFECT
How effective altruism let Sam Bankman-
Fried happen
Profound philosophical errors enabled the FTX collapse.
by Dylan Matthews
Updated Dec 13, 2022, 1:50 AM GMT
14.03.2025, 10:22 How effective altruism let Sam Bankman-Fried and the FTX collapse happen | Vox
https://www.vox.com/future-perfect/23500014/effective-altruism-sam-bankman-fried-ftx-crypto 1/27
Dylan Matthews is a senior correspondent and head writer for Vox’s Future Perfect section and has worked at
Vox since 2014. He is particularly interested in global health and pandemic prevention, anti-poverty efforts,
economic policy and theory, and conflicts about the right way to do philanthropy.
I have a lot of reasons to be furious at Sam Bankman-Fried. His extreme
mismanagement of FTX (which his successor John J. Ray III, who previously helped
clean up the Enron debacle, described as the worst he’s ever seen) led to the sudden
collapse of a $32 billion financial company. He lost at least $1 billion in client funds
after surreptitiously transferring it to a hedge fund he also owned, potentially in an
effort to make up for huge losses there. His historic management failures pulled the
rug out from under his users, his staff, and the many charities he promised to fund.
He hurt many, many, many people. On Monday, news broke that he had been arrested
in the Bahamas, where FTX is based, after US prosecutors in the Southern District of
Manhattan had filed criminal charges of wire fraud, wire fraud conspiracy, securities
fraud, securities fraud conspiracy, and money laundering against him, according to
reporting by the New York Times.
But for me, the most disturbing aspect of the Bankman-Fried saga, the one that kept
me up at night, is how much of myself I see in him.
Amanda Northrop/Vox
A D V E R T I S E M E N T

Like me, Bankman-Fried (“SBF” to aficionados) grew up in a college town
surrounded by left-leaning intellectuals, including both of his parents. So did his
business partner and Alameda Research CEO Caroline Ellison, the child of MIT
professors. Like me, they were both drawn to utilitarian philosophy at a young age.
Like me, they seemed fascinated by what their privileged position on this planet
would enable them to do to help others, and embraced the effective altruism
movement as a result. And the choices they made because of this latter deliberation
would prove disastrous.
Something went badly wrong here, and my fellow journalists in the take mines have
been producing a small library of theories of why. Maybe it was SBF and Ellison’s
choice to earn to give, to try to make as much money as possible so they could give it
away. Maybe the problem was that they averted their gaze from global poverty to more
“longtermist” causes. Maybe the issue is that they were not giving away their money
sufficiently democratically. Maybe the problem was a theory of change that involved
billionaires at all.
It took me a while to think through what happened. I thought Bankman-Fried was
going to commit billions toward tremendously beneficial causes, a development I
chronicled in a long piece earlier this year on how EA was coping with its sudden
influx of billions. The revelation that his empire was a house of cards was shattering,
and for weeks I was too angry, bitter, and deeply depressed to say much of anything
about it (much to the impatience of my editor).
There’s still plenty we don’t know, but based on what we do know, I don’t think the
problem was earning to give, or billionaire money, or longtermism per se. But the
problem does lie in the culture of effective altruism. SBF was an inexperienced 25-
year-old hedge fund founder who wound up, unsurprisingly, hurting millions of
people due to his profound failures of judgment when that hedge fund grew into
something enormous — failures that can be laid in part at the feet of EA.
For as much good as I see in that movement, it’s also become apparent that it is deeply
immature and myopic, in a way that enabled Bankman-Fried and Ellison, and that it
desperately needs to grow up. That means emulating the kinds of practices that more
mature philanthropic institutions and movements have used for centuries, and
becoming much more risk-averse. EA needs much stronger guardrails to prevent
another figure like Bankman-Fried from emerging — and to prevent its tenets from
becoming little more than justifications for malfeasance.
Despite everything that’s happened, this isn’t a time to give up on effective altruism.
EA has quite literally saved lives, and its critique of mainstream philanthropy and
politics is still compelling. But it needs to change itself to keep changing the world for
the better.
How crypto bucks swept up EA — and us?
First, a disclosure: This August, Future Perfect — the section of Vox you’re currently
reading — was awarded a $200,000 grant from Bankman-Fried’s family foundation.
The grant was for a reporting project in 2023, which is now on pause. (I should be
clear that, under the terms of the grant from SBF’s foundation, Future Perfect has
ownership of its content and retains editorial independence, as is standard practice
for all of our grants.)
Despite everything, this isn’t a time to give up on
effective altruism

We’re currently having internal discussions about the future of the grant, mainly
around the core question: What’s the best way to do good with it? It’s more
complicated than just giving it back, not least because it’s hard to be sure where the
money will go — will it go toward making victims whole, for instance?
Obviously, knowing what we know now, I wish we hadn’t taken the money. It proved
the worst of both worlds: It didn’t actually help our reporting at all, and it put our
reputation at risk.
But the honest answer to whether I regret taking the money knowing what we knew
then, the answer is no. Journalism, as an industry, is struggling badly. Employment in
US newsrooms fell by 26 percent from 2008 to 2020, and this fall has seen another
end-of-year wave in media layoffs. Digital advertising has not made up for the
collapse of print ads and subscriptions, and digital subscription models have proven
hit or miss. Vox is no different from other news organizations in our need to find
sources of revenue. Based on what we knew at the time, there was also little reason to
believe Bankman-Fried’s money was ill-gotten.
(This is also as good a place as any to clear the air about Future Perfect’s mission. We
have always described Future Perfect as “inspired by” effective altruism — meaning
that it’s not part of the movement but informed by its underlying philosophy. I’m an
EA, but my editor is not; indeed, the majority of our staff aren’t EAs at all. What
unites us is the mission of using EA as a lens, prizing importance, tractability, and
neglectedness, to cover the world — something that leads to a set of coverage
priorities and ideas that we believe are woefully underrepresented in the media.)
In the aftermath of the FTX crash, a common criticism I’ve gotten via email and
Twitter is that I, and other EAs, should have known this guy was sketchy. And in some
sense, the sense in which crypto as a whole is a kind of royal scam without much of a
use case beyond paying for drugs, we all knew he was. I said as much on this website.
But while I think crypto is stupid, millions apparently disagreed, and wanted places
to trade it, which is why the stated business activities of Alameda and FTX made
sense as things that would be immensely profitable in a normal, legal sense. Certain
aspects of FTX’s operations did seem a bit noxious, particularly as its advertising and
publicity campaigns ramped up. “I’m in on crypto because I want to make the biggest
global impact for good,” read an ad FTX placed in magazines like the New Yorker and
Vogue, featuring photos of Bankman-Fried (other ads in the same campaign featured
model Gisele Bündchen, one of many celebrities who endorsed the platform). As I
said in August, “buying up Super Bowl ads and Vogue spreads with Gisele Bündchen
to encourage ordinary people to put their money into this pile of mathematically
complex garbage is … actually morally questionable.”
I stand by that. I also stand by the idea that what the money was meant to do matters.
In the case of the Bankman-Fried foundations, it was for funding coverage and
political action around improving the long-term trajectory of humanity. It seemed
like a worthwhile topic before FTX’s collapse — and it still is.
The problem isn’t longtermism …
Ah, yes: the long-term trajectory of humanity, the trillions upon trillions of beings
who could one day exist, dependent on our actions today. It’s an impossible concept to
express without sounding unbelievably pretentious, but it’s become a growing focus of
effective altruism in recent years.
I think crypto is stupid. Millions apparently disagreed.

Many of the movement’s leaders, most notably Oxford moral philosopher Will
MacAskill, have embraced an argument that because so many more humans and
other intelligent beings could live in the future than live today, the most important
thing for altruistic people to do in the present is to promote the welfare of those
unborn beings, by ensuring that future comes to be by preventing existential risks —
and that such a future is as good as possible.
MacAskill’s book on this topic What We Owe the Future received one of the biggest
receptions of any philosophy monograph in recent memory, and both it and his more
technical work with fellow Oxford philosopher Hilary Greaves make pointed, highly
contestable claims about how to weigh future people against people alive today.
But the theoretical debate obscures what funding “longtermist” causes means in
practice. One of the biggest shortcomings of MacAskill’s book, in my view, is that it
failed to lay out what “making the future go as well as possible” involves in practice
and policy. The most specific it got was in advocating measures to prevent human
extinction or a catastrophic collapse in human society.
Unless you are a member of the Voluntary Human Extinction movement, you’ll
probably agree that human extinction is indeed bad. And you don’t need to rely on the
moral math of longtermism at all to think so.
If one goes through the “longtermist” causes funded by Bankman-Fried’s now-
defunct charitable enterprises and by the Open Philanthropy Project (the EA-aligned
charitable group funded by billionaires Cari Tuna and Dustin Moskovitz), the money
is overwhelmingly dedicated to efforts to prevent specific threats that could
theoretically kill billions of humans. Before the collapse of FTX, Bankman-Fried put
millions into scientists, companies, and nonprofits working on pandemic and
bioterror prevention and risks from artificial intelligence.
It’s fair and necessary to dispute the empirical assumptions behind those
investments. But the core theory that we are in an unprecedented age of existential
risk and that humans must responsibly regulate technologies that are powerful
enough to destroy ourselves is very reasonable. While critics often charge that
longtermism takes away resources from more pressing present problems like climate
change, the reality is that pandemic prevention is, bafflingly, underfunded, explicitly
compared to climate change and especially compared to the seriousness of the threat,
and longtermists were trying to do something about it.
Sam’s brother and main political deputy Gabe Bankman-Fried was investing serious
capital into a strategy to force an evidently unwilling Congress to appropriate the tens
of billions of dollars annually needed to make sure nothing like Covid happens again.
Mainstream funders like the MacArthur Foundation had pulled out of nuclear
security programs, even as the war in Ukraine made an exchange likelier than it had
been in decades, but Bankman-Fried and groups he supported were eager to fill the
gap.
I have a hard time looking at those funding decisions and concluding that’s where
things went wrong.
… the problem is the dominance of philosophy
You’ll probably agree that human extinction is indeed
bad

Even before the fall of FTX, longtermism was creating a notable backlash as the
“parlor philosophy of choice among the Silicon Valley jet-pack set,” in the words of
the New Republic’s Alexander Zaitchik. Some EAs like to harp on
mischaracterizations by longtermism’s critics, blaming them for making the concept
seem bizarre.
That might be comforting, but it’s mistaken. Longtermism seems weird not because
of its critics but because of its proponents: it’s expressed mainly by philosophers, and
there are strong incentives in academic philosophy to carry out thought experiments
to increasingly bizarre (and thus more interesting) conclusions.
This means that longtermism as a concept has been defined not by run-of-the-mill
stuff like donating to nuclear nonproliferation groups, but by the philosophical
writings of figures like Nick Bostrom, MacAskill, Greaves, and Nick Beckstead,
figures who have risen to prominence in part because of their willingness to expound
on extreme ideas.
These are all smart people, but they are philosophers, which means their entire job is
to test out theories and frameworks for understanding the world, and try to sort
through what those theories and frameworks imply. There are professional incentives
to defend surprising or counterintuitive positions, to poke at widely held pieties and
components of “common sense morality,” and to develop thought experiments that
are memorable and powerful (and because of that, pretty weird).
This isn’t a knock on philosophy; it’s what I studied in college and a field from which I
have learned a tremendous amount. It’s good for society to have a space for people to
test out strange and surprising concepts. But whatever the boundary-pushing
concepts being explored, it’s important not to mistake that exploration for practical
decision-making.
When Bostrom writes a philosophy article for a philosophy journal arguing that total
utilitarians (who think one should maximize the total sum of happiness in the world)
should prioritize colonizing the galaxy, that should not, and cannot, be read as a real
policy proposal, not least because “colonizing the galaxy” probably is not even a thing
humans can do in the next thousand years. The value in that paper is exploring the
implications of a particular philosophical system, one that very well might be badly
wrong. It sounds science fictional because it is, in fact, science fiction, in the ways
that thought experiments in philosophy are often science fiction.
The dominance of academic philosophers in EA, and those philosophers’ increasing
attempts to apply these kinds of thought experiments to real life — aided and abetted
by the sudden burst of billions into EA, due in large part to figures like Bankman-
Fried — has eroded the boundary between this kind of philosophizing and real-world
decision-making. Poets, as Percy Shelley wrote, may be the unacknowledged
legislators of the world, but EA made the mistake of trying to turn philosophers into
the actual legislators of the future. A good start would be more clearly stating that
funding priorities, for now, are less “longtermist” in this galaxy-brained Bostrom
sense and more about fighting specific existential risks — which is exactly what EA
funders are doing in most cases. The philosophers can trod the cosmos, but the
funders and advocates should be tethered closer to Earth.
The problem isn’t billionaires’ billions …
Second only to complaints about longtermism in the corpus of anti-effective altruist
writing are complaints that EA is inherently plutocratic. Effective altruism began
with the group Giving What We Can, which asked members (including me) to
promise to give 10 percent of their income to effective charities for the rest of our
lives.
It sounds science fictional because it is, in fact, science
fiction

This, to critics, equates “doing good” with “giving money to charity.” The problem
only grew when the donor base was no longer individuals making five or six figures
and donating 10 percent, but literal billionaires. Not only that, but those billionaires
(including Bankman-Fried but also Tuna and Moskovitz) became increasingly
interested in investing in political change through advocacy and campaigns.
Longtermist goals, even less cosmic ones like preventing pandemics, require political
action. You can’t stop the next Covid or prevent the rise of the robots with all the
donated anti-malaria bednets in the world. You need policy. But is that not anti-
democratic, to allow a few rich people to try to influence the whole political system
with their fortunes?
It’s definitely anti-democratic, but not unlike democracy itself, it’s also the best of a
few rotten options. The fact of the matter is that, in the United States in the 21st
century, the alternative to a politics that largely relies on benevolent billionaires and
millionaires is not a surge in working-class power. The alternative is a total victory for
the status quo.
Suppose you live in the US and would like to change something about the way our
society is organized. This is your first mistake: You want change. The US political
system is organized in such a way as to produce enormous status quo bias. But maybe
you’re lucky and the change you want is in the interest of a powerful corporate lobby,
like easing the rules around oil drilling. Then corporations who would benefit might
give you money — and quite a lot of it — to lobby for it.
What if you want to pass a law that doesn’t help any major corporate constituency?
Which is, y’know, most good ideas for laws? Then your options are very limited. You
can try to start a major membership association like the AARP, where small
contributions from members of the groups fund the bulk of their activities. This is
much easier said than done. Groups like this have been on the decline for decades,
and major new membership groups like Indivisible tend to get most of their money
from sources other than their members.
It’s definitely anti-democratic, but not unlike
democracy itself, it’s also the best of a few rotten
options
What sources, then? There’s unions — or perhaps more accurately, there were unions.
In 1983, 20.1 percent of American workers were in a union. In 2021, the number was
10.3 percent. A measly 6.1 percent of private sector workers were unionized. The
share just keeps falling and falling, and while some smart people have ideas to reverse
it, those ideas require government actions that would probably require plenty of
lobbying to reach fruition, and who exactly is going to fund that? Unions can barely
keep themselves afloat, much less fund extensive advocacy outside their core
functions. The Economic Policy Institute, long the most influential union-aligned
think tank in the US, took only 14 percent of its funding from unions in 2021.
So the answer to “who funds you” if you are doing advocacy or lobbying and do not
work for a major corporation is usually “foundations.” And by “foundations,” I mean
“millionaires and billionaires.” There’s no small irony in the fact that causes from
expanded social safety net programs to increased access to health insurance to higher
taxes on rich people are primarily funded these days by rich people and their estates.
It’s one of history’s strangest twists that Henry Ford, possibly the second most
influential antisemite of the 20th century, wound up endowing a foundation that
funded the creation of progressive groups like the Natural Resources Defense Council
and the Mexican American Legal Defense and Educational Fund. But it happened,
and it happens much more than you’d think. US history is littered with progressive
social movements that depended on wealthy benefactors: Abolitionists depended on
donors like Gerrit Smith, the richest man in New York who bankrolled the Liberty
and Republican parties as well as John Brown’s uprising in Harpers Ferry; Brown v.
Board of Education was the result of a decades-long strategy of the NAACP Legal

Defense Fund, a fund created due to the intervention of the Garland Fund, a
philanthropy bankrolled by an heir of a senior executive of what’s now Citibank.
Is this arrangement ideal? Of course not. Scholar Megan Ming Francis has recently
argued that even the Garland Fund provides an example of wealthy donors perverting
the goals of social movements. She contends it pushed the NAACP away from a
strategy focused on fighting lynching toward one focused on school desegregation.
That won Brown, but it also undercut goals that were, at the time, more important to
Black activists.
These are important limitations to keep in mind. At the same time, would I have
preferred the Garland Fund not invest in Black liberation at all? Of course not.
This, essentially, is why I find the use of SBF to reject billionaire philanthropy in
general unpersuasive. It is completely intellectually consistent to decide that
accepting funding from wealthy, potentially corrupt sources is unacceptable, and that
it is okay, as would inevitably follow, if this kind of unilateral disarmament materially
hurts the causes you care about. It’s intellectually consistent, but it means accepting
defeat on everything from higher taxes on the rich to civil rights to pandemic
prevention.
… it’s the porous boundaries between the billionaires and
their giving
There’s a fundamental difference between Bankman-Fried’s charitable efforts and
august ones like the Rockefeller and Ford foundations: these philanthropies are,
fundamentally, professional. They’re well-staffed, normally run institutions. They
have HR departments and comms teams and accountants and all the other stuff you
have when you’re a grown-up running a grown-up organization.
There are disadvantages to being normal (groupthink, excessive conformity) but
profound advantages, too. All these normal practices emerged for a reason: They were
added to institutions over time to solve problems that reliably come up when you don’t
have them.
The Bankman-Fried empire was not normal in any way
The Bankman-Fried empire was not normal in any way. For one thing, it had already
sprawled into a bevy of different institutions in the very short time it existed. The
most public-facing group was the FTX Future Fund, but there was also Building a
Stronger Future, a funder sometimes described as a “family foundation” for the
Bankman-Frieds. (That’s the one that awarded the grant to Future Perfect.) There
was also Guarding Against Pandemics, a lobbying group run by Gabe Bankman-Fried
and funded by Sam.
The deeper problem, behind these operational hiccups, is that in lieu of a clear,
hierarchical decision-making structure for deciding where Bankman-Fried’s fortune
went, there was nothing separating charitable decision-making from Bankman-Fried
individually as a person. I never met SBF in person or talked to him one on one — but
on a couple occasions, members of his charity or political networks pitched me ideas
and CC’d Sam. This is not, I promise you, how most foundations operate.
Bankman-Fried’s operations were deeply incestuous, in a way that has had profoundly
negative consequences for the causes that he professed to care about. If Bankman-
Fried had given his fortune to an outside foundation with which he and his family had
limited involvement, his downfall would not have tainted, say, pandemic prevention
groups doing valuable work. But because he put so little distance between himself and
the causes he supported, dozens of worthwhile organizations with no involvement in
his crimes find themselves not only deprived of funding but with serious reputational
damage.
The good news for EAs is that Open Philanthropy, the remaining major EA-aligned
funding group, is a much more normal organization. Its form of professionalization is

something for the rest of the movement to emulate.
The problem is utilitarianism free from any guardrails …
Sam Bankman-Fried is a hardcore, pure, uncut Benthamite utilitarian. His mother,
Barbara Fried, is an influential philosopher known for her arguments that
consequentialist moral theories like utilitarianism that focus on the actual results of
individual actions are better suited for the difficult real-world trade-offs one faces in
a complex society. Her son apparently took that insight very, very seriously.
Effective altruists aren’t all utilitarians, but the core idea of EA — that you should
attempt to act in such a way to promote the greatest human and animal happiness
and flourishing achievable — is shot through with consequentialist reasoning. The
whole project of trying to do the most good you can implies maximizing, and
maximizing of “the good,” and that is the literal definition of consequentialism.
It’s not hard to see the problem here: If you’re intent on maximizing the good, you
better know what the good is — and that isn’t easy. “

EA is about maximizing a
property of the world that we’re conceptually confused about, can’t reliably define or
measure, and have massive disagreements about even within EA,” Holden Karnofsky,
the co-CEO of Open Philanthropy and a leading figure in the development of effective
altruism, wrote in September. “By default, that seems like a recipe for trouble.”
Indeed it was. It looks increasingly likely that Sam Bankman-Fried appears to have
engaged in extreme misconduct precisely because he believed in utilitarianism and
effective altruism, and that his mostly EA-affiliated colleagues at FTX and Alameda
Research went along with the plan for the same reasons.
When he was an undergrad at MIT, Bankman-Fried was reportedly planning to work
on animal welfare issues until a pivotal conversation with Will MacAskill, who told
him that because of his mathematical prowess, he might be able to do more good by
working as a “quant” in the finance sector and donating his healthy earnings to
effective charities than he ever could giving out flyers promoting veganism.
If the conclusions are ugly enough, you should just junk
the theory
This idea, known as “earning to give,” was one of the first distinctive contributions of
effective altruism as a movement, specifically of the group 80,000 Hours, and I think
taking a high-earning job with the explicit aim of donating the money still makes a lot
of sense for most big-money options.
But what SBF did was not just quantitatively but qualitatively different from classic
“earn to give.” You can make seven figures a year as a trader in a hedge fund, but
unless you manage the whole fund, you probably won’t become a billionaire.
Bankman-Fried very much wanted to be a billionaire — so he could have more
resources to devote to EA giving, if we take him at his word — and to do that, he set up
whole new corporations that never would’ve existed without him. Those corporations
then engaged in incredibly risky business practices that never would’ve occurred if he
and his team hadn’t entered the field. He was not one-for-one replacing another
finance bro who would have used the earnings on sushi and strippers rather than
altruistic causes. He was building a whole new financial world, with consequences
that would be much grander in scale.
And in building this world, he acted like a vulgar utilitarian. Philosophers like to talk
about “biting the bullet”: accepting an unsavory implication of a theory you’ve
adopted, and arguing that this implication really isn’t that bad. Every moral theory
has bullets to bite; Kant, who believed morality was less about good consequences
than about treating humans as ends in themselves, famously argued that it is never
acceptable to lie. That leads to freshman seminar-level questions about whether it’s
okay to lie to the Gestapo about the Jewish family you’re hiding in your attic. Biting
the bullet in this case — being true to your ethics — means the family dies.

Utilitarianism has ugly implications, too. Would you kill one healthy person to
redistribute their organs to multiple people who need them to live? The reality is that
if a conclusion is ugly enough, the correct approach isn’t to bite the bullet, but to think
about how a more reasonable conclusion could comply with your moral theory. In the
real world, we should never harvest hearts and lungs from healthy, unconsenting
adults, because a world where hospitals would do that is a world where no one ever
goes to the hospital. If the conclusions are ugly enough, you should just junk the
theory, or temper it. Maybe the right theory isn’t utilitarianism, but utilitarianism
with a side constraint forbidding ever actively killing people. That theory has
problems, too (what about self-defense? a defensive war like Ukraine’s?), but
thinking through these problems is what moral philosophers spend all day doing. It’s
a full-time job because it’s really hard.
… and a utilitarianism full of hubris …
Bankman-Fried’s error was an extreme hubris that led him to bite bullets he never
should have bitten. He famously told economist Tyler Cowen in a podcast interview
that if faced with a game where “51 percent [of the time], you double the Earth out
somewhere else; 49 percent, it all disappears,” he’d keep playing the game continually.
This is known as the St. Petersburg paradox, and it’s a confounding problem in
probability theory, because it’s true that playing the game creates more happy human
lives in expectation (that is, adjusting for probabilities) than not playing. But if you
keep playing, you’ll almost certainly wipe out humankind. It’s an example of where
normal rules of rationality seem to break down.
But Bankman-Fried was not interested in playing by the normal rules of rationality.
Cowen notes that if Bankman-Fried kept this up, he’d almost certainly wipe out the
Earth eventually. Bankman-Fried replied, “Well, not necessarily. Maybe you St.
Petersburg paradox into an enormously valuable existence. That’s the other option.”
These are fun dorm room arguments. They should not guide the decision-making of
an actual financial company, yet there is some evidence they did. An as-yet-
unconfirmed account of an Alameda all-hands meeting describes CEO Caroline
Ellison explaining to staff that she and Bankman-Fried faced a choice in early
summer 2022: either to let Alameda default after some catastrophic losses, or to raid
consumer funds at FTX to bolster Alameda. As the researcher David Dalrymple has
noted, this was basically her and Bankman-Fried making a “double or nothing” coin
flip: By taking this step, they reasoned they could either save Alameda and FTX or
lose both (as wound up happening), rather than keep just FTX, as in a scenario where
the consumer funds were not raided.
This is not, I should say, the first time a consequentialist movement has made this
kind of error. While Karl Marx denied having any moral views at all (he was a
“scientific” socialist, not a moralist), many Marx scholars have described his outlook
as essentially consequentialist, imploring followers to act in ways that further the
long-run revolution. More importantly, Marx’s most talented followers understood
him in this way. Leon Trotsky defined Marxist ethics as the belief that “the end is
justified if it leads to increasing the power of man over nature and to the abolition of
the power of man over man.” In service of this end, all sorts of means (“if necessary,
by an armed rising: if required, by terrorism,” as he wrote in an earlier book) are
justified.
Trotsky, like Bankman-Fried, was wrong. He was wrong in using a consequentialist
moral theory in which he deeply believed to justify all manner of actions — actions
that in turn corrupted the project he had joined beyond measure. By winning power
These are fun dorm room arguments. They should not
guide the decision-making of an actual financial
company.

through terror, with a secret police and the crushing of dissenting factions, he helped
create a state that operated similarly and would eventually murder him.
Bankman-Fried, luckily, has yet to kill anyone. But he’s done a huge amount of harm,
due to a similar sense that he was entitled to engage in grand consequentialist moral
reasoning when he knew there was a high probability that many other people could
get hurt.
… but the utilitarian spirit of effective altruism still matters
Since the FTX empire collapsed, there’s been an open season of criticism on effective
altruism, as well there should be. EAs messed up. To some degree, we’ve got to just
take the shots, update our priors, and keep going.
The only criticism that really gets under my skin is this: that the basic premises of EA
are trite, or universally held. As Freddie deBoer, the raconteur and essayist, put it:
“the correct ideas of EA are great, but some of them are so obvious that they shouldn’t
be ascribed to the movement at all, while the interesting, provocative ideas are
fucking insane and bad.”
This impression is largely the fault of EA’s public messaging. The philosophy-based
contrarian culture means participants are incentivized to produce “fucking insane
and bad” ideas, which in turn become what many commentators latch to when trying
to grasp what’s distinctive about EA. Meanwhile, the definition the Centre for
Effective Altruism uses (“a project that aims to find the best ways to help others, and
put them into practice”) really does seem kind of trite in isolation. Isn’t that what
everyone’s doing?
No, they are not. I used to regularly post about major donations from American
billionaires, and you’d be amazed at the kind of bullshit they fund. David Geffen spent
$100 million on a new private school for children of UCLA professors (faculty brats:
famously the wretched of the earth). John Paulson gave $400 million to the famously
underfunded Harvard University and its particularly underfunded engineering
division (the fact that Harvard’s computer science building is named after the
mothers of Bill Gates and Steve Ballmer should tell you something about its financial
condition). Stephen Schwarzman gave Yale $150 million for a new performing arts
center; why not an international airport?
You don’t need to be an effective altruist to look at these donations and wonder what
the hell the donors were thinking. But EA gives you the best framework I know with
which to do so, one that can help you sift through the detritus and decide what moral
quandaries deserve our attention. Its answers won’t always be right, and they will
always be contestable. But even asking the questions EA asks — how many people
does this affect? Is it at least millions if not billions? Is this a life-or-death matter? A
wealth or destitution matter? How far can a dollar actually go in solving this
problem? — is to take many steps beyond where most of our moral discourse goes.
You’d be amazed at the kind of bullshit they fund

One of the most fundamentally decent people I’ve met through EA is an ex-lawyer
named Josh Morrison. After donating his kidney to a stranger, Morrison left his firm
to start a group promoting live organ donation. We met at an EA Global conference in
2015, and he proceeded to walk me through my own kidney donation process, taking a
huge amount of time to help someone he barely knew. These days he runs a group that
advocates for challenge trials, in which altruistic volunteers are willingly infected
with diseases so that vaccines and treatments can be tested more quickly and
effectively.
Years later, we were getting lunch when he gave me, for no occasion other than he felt
like it, a gift: a copy of Hilary Mantel’s historical novel A Place of Greater Safety,
which tells the story of French revolutionaries Camille Desmoulins, Georges Danton,
and Maximilien Robespierre. All of them began as youthful, idealistic opponents of
the French monarchy, and all would be guillotined before the age of 37. Robespierre
and Desmoulins were school chums, but the former still ordered the latter’s
execution.
It reminded Josh a bit of the fervent 20- and 30-something idealists of EA. “I hope
this book doesn’t turn out to be about us,” he told me. Even then, I could tell he was
only half-joking.
Bankman-Fried has more than a whiff of this crew about him (probably Danton; he
lacks Robespierre’s extreme humorlessness). But if EA has just been through its
Terror, there’s a silver lining. The Jacobins were wrong about many things, but they
were right about democracy. They were right about liberty. They were right about the
evils of the ancien regime, and right to demand something better. The France of today
looks much more like that of their vision than that of their enemies.
That doesn’t retroactively justify their actions. But it does justify the actions of the
thousands of French men and women who learned from their example and worked, in
peace, for two centuries to build a still-imperfect republic. They didn’t give up the
faith because their ideological ancestors went too far.
EAs can help the world by keeping the faith, too. Last year, GiveWell, one of the early
and still one of the best EA institutions, directed over $518 million toward its top
global health and development charities. It chose those charities because they had a
high probability of saving lives or making lives dramatically better through higher
earnings or lessened illness. By the group’s metrics, the donations it drove to four
specific groups (the Against Malaria Foundation, Malaria Consortium, New
Incentives, and Helen Keller International) saved 57,000 lives in 2021. The group’s
recommendations to them from 2009 to present have saved some 159,000 lives.
That’s about as many people as live in Alexandria, Virginia, or Charleston, South
Carolina.
GiveWell, should be proud of that. As someone who’s donated tens of thousands of
dollars to GiveWell top charities over the years, I’m personally very proud of that. EA,
done well, lets people put their financial privilege to good use, to literally save lives,
and in the process give our own lives meaning. That’s something worth fighting for.
Update, December 12, 8:40 pm: This story was originally published on December 12
and has been updated to include the news of Sam Bankman-Fried’s arrest.
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