by Greg Barker
Thursday, 26
May 2022
Profile
18:09

Sam Bankman-Fried: misguided philanthropist

The crypto billionaire plans to save democracy by pouring money into politics
by Greg Barker
Sam Bankman-Fried, CEO of FTX US Derivatives. Credit: Getty

Ever since Sam Bankman-Fried, the CEO of crypto exchange FTX, left Wall Street back in 2018, he’s been doing the rounds in the media, spreading a philanthropic message. Via effective altruism — a philosophy focused on “pursuing a lucrative career to have more money to give away,” as Intelligencer described it — Bankman-Fried wants to change the world. Now, as the head honcho of crypto’s biggest derivatives casino, he’s amassed a net worth of $22 billion, a more-than-enough sum to make a significant global impact.

But for better or worse? Before founding FTX, Bankman-Fried worked for trading behemoth Jane Street Capital, during which he donated 50% of his salary to pro-animal welfare organisations. 

Yet after starting his own enterprise, Bankman-Fried started earning more — and giving less. After amassing a multi-billion dollar fortune through FTX, his company’s foundation pledged to share some of its profits with charitable causes. The amount? A paltry 1% of revenues from trading fees, slightly less than the company’s own user donations.

It’s hard to square Bankman-Fried’s desire to create a better world through philanthropy while also running a crypto ‘exchange’, a euphemism for what is, at best, a new-age brokerage firm and, at worst, an unregulated casino. In both cases, most users will be losing money, and if the cynics have it right, underage gamblers can easily join them. 

But this isn’t to say that Bankman-Fried has stopped giving his money away. Only now, it is to political candidates, not charities. Earlier this week, the crypto CEO announced that he was pledging up to $1 billion to “influence the 2024 United States presidential election,” by “cutting across the partisan divide” as well as “promoting freedom and preserving democracy.” 

That crypto billionaires are starting to get involved in politics is unsurprising. Since the 2020 presidential election, the crypto industry has poured over $30million into campaigns with Democrats and Republicans alike coming out as defenders. But given how fraught with risk and fraud this industry is, we should be concerned about what the likes of Bankman-Fried are planning. ‘SBF’s wealth derives from a business model that is predicated on promoting dubious investment schemes and profiting from the trades. As the billionare himself indirectly conceded, it is basically one elaborate Ponzi scheme. 

For crypto holders, that’s an inconvenient truth, but for a member of the crypto elite who wants to become the next Bill Gates, this is especially problematic. Because if you’re in a Ponzi business, relying on a constant stream of new money coming in, how can you ever be expected to give most of it away?

Join the discussion


To join the discussion, get the free daily email and read more articles like this, sign up.

It's simple, quick and free.

Sign me up
Subscribe
Notify of
guest
6 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Richard Abbot
Richard Abbot
1 month ago

Everyone who burns with desire to ‘change the world’ has got something wrong with them. Such people should take a long hard look in the mirror, whereon they might see what, and who, the real problem is.

Philip Stott
Philip Stott
1 month ago

Whilst I agree with the thrust of the article i.e we should be wary of the likes of SBF, I’d disagree that crypto is a Ponzi scheme. It’s a ‘greater fools’ market, prone to volatile swings in price.

Richard Craven
Richard Craven
1 month ago
Reply to  Philip Stott

Thanks, there’s nothing wrong with introducing a bit more clarity into the proceedings.

David Smith
David Smith
1 month ago

This guy is a nut case who donated about 5 million to the disastrous Joe Biden who is destroying, not improving, democracy.
He is another raging progressive who holds typical “regressive” views on controlling people to prevent pandemics, etc.
I have now found a reason to avoid the crypto market.

polidori redux
polidori redux
1 month ago

“The crypto billionaire plans to save democracy by pouring money into politics”
Yeah that’ll do it.

Last edited 1 month ago by polidori redux
Andy O'Gorman
Andy O'Gorman
1 month ago

Does the world need another Soros? He and fools like him have all but destroyed what little ‘democracy’ resemblance the US still had!
Trump was well, Trump. Biden is totally delusional and as someone suggested, controlled by those with access to the Teleprompter.
I am pretty certain that the Donkey Democrats are working day and night to come up with another scamdemic to force another ‘mail in voting’ to hopefully retain power.