Classical utilitarian entrepreneur Sam Bankman-Fried (SBF) is the founder and former CEO of the FTX cryptocurrency exchange. SBF also managed assets through Alameda Research, a quantitative cryptocurrency trading firm of effective altruists; until November 2022, SBF was the wealthiest billionaire in the cryptosphere.
CONTEMPORARY UTILITARIANSSam Bankman-Fried
(1992 - )In November 2023, a New York jury found SBF guilty of fraud and conspiracy. He will appeal. In March 2024, SBF was given a prison sentence of 25 years.
Around the age of 12, SBF spontaneously developed an interest in utilitarianism. A vegan, SBF has been heavily involved in the effective altruist (EA) community.
SBF describes himself as
"...a total, act, hedonistic/one level (as opposed to high and low pleasure), classical (as opposed to negative) utilitarian”.After graduating from MIT, SBF worked at Jane Street Capital, a proprietary trading firm that trades international ETFs. While at Jane Street, SBF gave away most of the money he made on the trading floor to the Center for Effective Altruism (CEA), 80,000 Hours and the Humane League, three charities his Oxford EA mentors had identified as especially efficient at saving lives (cf. Going Infinite, The Rise and Fall of a New Tycoon (2023) by Michael Lewis and postscript (2024)).
His mother Barbara describes SBF as a "take-no-prisoners utilitarian". Interviewed by economist Tyler Cohen in March 2022, SBF set out his approach to risk in a discussion of the St. Petersburg paradox. The St. Petersburg paradox is widely reckoned a severe challenge to classical utilitarianism:
TC: Ok, but let’s say there’s a game: 51% you double the Earth out somewhere else, 49% it all disappears. And would you keep on playing that game, double or nothing?On the face of it, both classical utilitarians and negative utilitarians alike should flip the coin. And keep on flipping.SBF: Yeah…take the pure hypothetical… yeah.
TC: So then you keep on playing the game. What’s the chance we’re left with anything? Don’t I just St. Petersburg Paradox you into non-existence?
SBF: No, not necessarily – maybe [we’re] St. Petersburg-paradoxed into an enormously valuable existence. That’s the other option.
A member of Giving What We Can, SBF announced plans to donate most of his vast wealth to effective charities over the course of his lifetime via the FTX Foundation Future Fund.
SBF's net worth peaked in early 2022 at an estimated $26 billion. Forbes declared him the richest person under thirty. SBF had plans to buy a country. As related in a memo drawn up by SBF's younger brother Gabe, the plan was to “purchase the sovereign nation of Nauru in order to construct a ‘bunker/shelter’ that would be used for ‘some event where 50-99.99% of people die [to] ensure that most EAs survive’” The memo notes plans to develop “sensible regulation around human genetic enhancement, and build a lab there”. The memo also notes that “probably there are other things it’s useful to do with a sovereign country, too."
SBF had wider political ambitions. Fellow EA Caroline Ellison, head of SBF's crypto hedge fund Alameda and on-off lover, reports at his trial that SBF told her there was a 5% chance he'd be US President "some day". The odds have since lengthened.
Testifying in court, Caroline explained SBF's guiding principle of effective value:
“He said that he was a utilitarian...he believed that the ways people tried to justify rules like don’t lie and don’t steal within utilitarianism didn’t work...the only moral rule that mattered was doing whatever would maximise utility.”Nearly 200 members of Congress may have benefitted from FTX largesse. FTX depositors would like the donations returned.
An Asperger, SBF's charisma didn't come naturally. "There were some things I had to teach myself to do," SBF told Michael Lewis in Going Infinite. "One is facial expressions. Like making sure I smile when I'm supposed to smile. Smiling was the biggest thing that I most weirdly couldn't do." Lewis writes that SBF wasn't initially convinced of the utility of making facial expressions: "What's the whole point of making facial expressions in the first place? If you're going to say something to me, just say it," he informed the author. "Why do I have to grin while you do it?"
SBF reports being chronically anhedonic and often mildly depressed his whole life. He was prescribed a cocktail of an EMSAM patch (selegiline) and Adderall (amphetamine salts) by FTX's in-house doctor. At higher dosages, selegiline loses its relative selectivity for MAO-B and acts as an unselective MAO inhibitor. The dangerous combination of amphetamines and an unselective, irreversible MAOI would normally be strongly contraindicated. SBF's drug regimen may have clouded his financial judgement at FTX.
From the outset, a small minority of EAs raised red flags (cf. "Should effective altruists participate in Ponzi schemes?" 20 March, 2021).
Their warnings were ignored.
FTX and Alameda went bankrupt in November 2022 amid allegations of financial impropriety. FTX customer funds had been siphoned off to Alameda ever since its inception. In December, SBF was released on $250 million bond to live with his parents. In January 2023, SBF pleaded not guilty to all criminal charges. In August, SBF's bail was revoked for alleged witness-tampering after he leaked his ex-girlfriend's love-letters to The New York Times. SBF's trial started in October. SBF blamed the demise of FTX on an unfortunate accounting error. In November, the jury returned a guilty verdict on all counts.
The Government had indicated it wouldn't be receptive to claims SBF was amassing wealth simply in order to improve the world.
Until an era of full-spectrum superintelligence, deontologists probably make better money-managers than classical utilitarians.
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GLOSSARY
The Coin Flipper
Effective Altruism
The Abolitionist Project
Some Utilitarian Memes
Number Go Up by Zeke Faux
ChatGPT on Effective Altruism
Cryptomania by Andrew Chow
Going Infinite by Michael Lewis
Sam Bankman-Fried (Wikipedia)
The Psychopharmacology Of The FTX Crash
The FTX Crypto Scandal Explainer Dictionary
Crypto Billionaire Sam Bankman-Fried (Forbes)
The Big Thing Effective Altruism (Still) Gets Right
Has the FTX Debacle Discredited Effective Altruism?
The Coin Flip That Could Convict Sam Bankman-Fried
How effective altruism let Sam Bankman-Fried happen
What Sam Bankman-Fried’s downfall means for effective altruism
You Know Who Had Sam Bankman-Fried’s Number? Charles Dickens
Effective altruism solved all the problems of capitalism—until it didn't
How Sam Bankman-Fried's fall exposes the perils of effective altruism
Sam Bankman-Fried, Effective Altruism, and the Question of Complicity
Fraud, cons and Ponzi schemes: did Sam Bankman-Fried use Madoff tactics?
OK, WTF Is 'Longtermism', the Tech Elite Ideology That Led to the FTX Collapse?
Effective altruism gave rise to Sam Bankman-Fried. Now it’s facing a moral reckoning
dave@bltc.com
