FTX CEO Sam Bankman-Fried: effective altruist or just another crypto billionaire?
Sam Bankman-Fried, otherwise known in the crypto industry by his initials SBF, is the 30-year-old billionaire founder of the crypto exchange FTX. Just as Steve Jobs’ trademark outfit was a black skivvy, SBF is renowned for his strikingly casual uniform of shorts and a FTX branded T-shirt. SBF is undoubtedly a difficult figure to pigeon hole, who despite his attestations of being down to earth and authentic, is a man of many contradictions.
SBF is brilliant to say the least. A physics degree from the prestigious MIT would be for many the peak of their success, but for SBF it was just the beginning. In three short years, since founding the FTX business in 2019, what SBF has achieved with FTX is not just success, but success on an astronomical scale. As of January 2022, the company is valued at US$32 billion.
SBF is a follower of effective-altruism, which is a fancy way of saying he pursues a career where he will only keep enough money to live comfortably, and the rest he will give away. However, the ‘giving away’ part comes with a caveat. He won’t give it all away right now. Before he completely follows through with his effective-altruism pursuits, he will invest his newfound wealth. SBF is investing to become even richer so that he can give away even more…
SBF’s dedication to the effective-altruism philosophy gets even more confusing when one considers the speaking lineup at the FTX-sponsored Crypto Bahamas Conference in late April. The star-studded guest list included the likes of sports star Tom Brady and his supermodel wife Giselle Buncheon, former heads of state Bill Clinton and Tony Blair, as well as former Trump administration Communications Director, Anthony Scaramuci. SBF might be quoted as saying “I don’t want a yacht,” but if the age-old adage of being judged by the company you keep holds true, then his Robin Hood persona becomes increasingly unbelievable.
Speaking of Robinhood, just last week SBF purchased a 7.6 per cent in the US retail investing app. How this plays into his effective-altruism philosophy is not completely clear, but Robinhood shareholders are certainly rejoicing at the news, with the share price jumping 24.9 per cent after the announcement of the purchase.
So far we know that SBF doesn’t want a yacht and that despite his billions he still drives a Toyota Corolla. But is it possible that he is hoping that he’ll simply be invited on the yacht of one of his famous friends? From Jeff Bezos, to Leonardo di Caprio, SBF certainly has options from within his social circle if he decides he actually does want to go sailing.
Perhaps the biggest risk to SBF fulfilling his effective-altruism dream down the line is that somewhere along the way, maybe when he’s shaking hands with the President or being fawned over by a popstar, that he forgets his initial goal. He says he is still devoted to the principle of maximising the good he does, but it’s a bitter pill to swallow when he’s willing to pay the conference speaking for Tony Blair, the man that led Britain to war in Iraq. And what could Blair possibly know about crypto anyway?
SBF is the child of Stanford University law professors and he grew up in the San Francisco Bay Area. From his parents he was introduced to the concept of utilitarianism; the notion that decisions should be made on the basis that they will deliver the greatest happiness for the greatest number. Precisely how hosting an invite only conference in the Bahamas, where the guests included crypto-whales and Wall Street elites improves the happiness of the greatest number isn’t exactly clear. Maybe SBF’s version of utilitarianism was in this instance confined to the private jet company operators at which conference goers were offered a discount?
SBF’s donations to charity
Forgetting for a moment SBF’s celebrity friendship circle, he certainly does give away a great deal of his wealth. In his early career at proprietary trading firm Jane Street Capital he donated half his salary to charity. It should be noted that Jane Street’s graduate salaries aren’t exactly crumbs (US$275,000 per year – excluding bonuses), with the firm well known for its generous compensation. More recently, SBF’s altruistic endeavours have included the US$50 million he gave to pandemic relief in India and climate initiatives. Another notable donation of SBF’s was his 2020 contribution of US$5.6 million to Joe Biden’s presidential campaign, making him one of the top donors. However, despite these good or righteous causes, Bloomberg has also reported that SBF has in fact donated less to charity than he has on other more frivolous ventures, like the naming rights for Miami Heat’s arena, valued at US$135 million.
FTX Opens in Australia
In March FTX announced its launch in Australia, a further expansion of the SBF empire. FTX represents stiff competition to some of the homegrown incumbents that may struggle to compete with FTX’s wider product offering.
Time will tell whether SBF proves himself to be the ultimate Robin Hood effective-altruist. And for the sake of fulfilling a key tenet of crypto ideology – that being equality – let’s hope he does eventually give his riches to those not so well off. For now, however, we can only assume that SBF may – or may not – be playing an effective PR game.