Sam Bankman-Fried and the Lies We Tell Ourselves

On Feb. 12, an X account for Sam Bankman-Fried, the disgraced founder of the crypto trading platform FTX, posted, “Under Biden, companies were forced offshore. Under @realDonaldTrump, they’re welcome back in America. Insane regulation by Dems: require licenses, refuse to give them out. They literally couldn’t operate in America. Under President Trump, that’s changed. The DOJ is no longer indicting entire industries.”

It was a personal message from Bankman-Fried, who is roughly two years into a 25-year federal prison sentence for conspiracy and wire fraud stemming from FTX’s dramatic collapse. The post followed a series written by Bankman-Fried the month before, communicated over a prison phone to an intermediary, and then shared with the online world. In those earlier messages, Bankman-Fried had criticized former President Biden, while lavishing praise on the Trump administration. On Jan. 29, Bankman-Fried had posted an 11-tweet thread titled, “Why I became a Republican in 2022.” Reports soon confirmed what practically everyone could already see: Bankman-Fried was lobbying President Trump for a pardon. 

In “Stealing the Future,” David Morris makes the case that Bankman-Fried’s fraud was driven not primarily by greed, accident, or negligence, though each certainly played a part, but by an “ends justify the means” hubris instilled in Bankman-Fried by the effective altruist movement. Morris, a financial journalist who was among the first to cover FTX’s collapse, uses the story of Bankman-Fried’s fall from grace to critique the cultural and intellectual forces that shaped him. Few are left spared in Morris’s account, from other FTX employees, to Stanford University, from effective altruism’s intellectual leadership to the upper echelons of the technology capitalist class.

The book retells the notorious story of FTX’s unraveling, which began in November 2022 when a company balance sheet that was circulated on social media revealed that the cryptocurrency exchange’s financial stability relied heavily on holdings from an investment firm named Alameda Research. It soon became clear that Alameda was a shell company operating under Caroline Ellison, Bankman-Fried’s meek, off-and-on lover and Alameda’s CEO, whom Bankman-Fried had micromanaged on a daily basis into making specific investments. The problem, however, was worse than that: Bankman-Fried had transferred billions of dollars directly from FTX customers’ accounts to pay for Alameda’s investments.

The fallout was catastrophic for FTX and the people in Bankman-Fried’s orbit. Bankman-Fried had ingratiated himself within elite circles, relying on his deep pockets and willingness to dole out donations. He had given hundreds of millions of dollars to philanthropies and political causes that mostly aligned with the Democratic Party. Bankman-Fried also had put money into startups, including a $500 million investment (of stolen customer funds) into the frontier artificial intelligence (AI) firm Anthropic, which would be worth several times that amount today. And he was one of the largest donors to effective altruist initiatives, along with Facebook co-founder Dustin Moskovitz and Moskowitz’s wife, Cari Tuna. But above all, Bankman-Fried was the greatest economic success story from the ranks of the effective altruist movement.

In simple terms, effective altruism is a philosophical theory that updates utilitarian ethics for the modern age and proposes concrete ways to put the theory into practice. The movement drew inspiration from Australian philosopher Peter Singer’s hypothetical dilemma of saving a child drowning in front of you versus one dying in Bangladesh: Why do we feel less morally obligated to save a child from suffering because of the mere distance between us? Effective altruists believe that Singer is right, and many urge people to put their moral energy and their financial resources behind preventing broader human suffering that lies ahead in the future rather than focusing on tragedies closer to hand. Many of its adherents are particularly concerned with famine, nuclear war, global health, animal rights, and the rise of boundless artificial intelligence. To prevent suffering and live an ethical life, some effective altruist thinkers encourage their followers to amass as much money as possible to donate to philanthropies and startups working to create solutions for these potentially existential crises.

Enter Bankman-Fried, whose interactions with effective altruism and its intellectual leader, William MacAskill, predated his professional success. Their relationship ran back to a 2012 lunch between the two when Bankman-Fried was still an undergraduate at the Massachusetts Institute of Technology. As FTX and the cryptocurrency industry exploded in 2020 and 2021, buoyed in part by pandemic stimulus checks, effective altruism’s appeal spread in highly educated parts of the U.S., Europe, and Australia, particularly among members of younger generations who craved a moral cause to dedicate their energy to amid anxiety over the world’s growing problems. Bankman-Fried became not only one of the movement’s largest financial supporters but one of its standard-bearers: a testament to the intellectual capacity, work ethic, and determination to do good that effective altruism purports to inspire. MacAskill would serve as a leader of FTX’s Future Fund, which gave $160 million to organizations aligned with effective altruist causes in 2022, including $33 million to groups connected to MacAskill himself. “Stealing the Future” diagnoses Bankman-Friend’s role as an effective altruist as the illness that caused—rather than a symptom of—his fraud. 

Morris calls his book “not a work of journalism, but of forensic philosophy.” Perhaps he is right. It is less a cohesive narrative about Bankman-Fried’s life and FTX’s collapse and more an argument against effective altruism. But in trading a work of journalism for one of philosophy, Morris sacrifices some of the storytelling and precision necessary to make such an argument, one that takes on some of society’s most prominent institutions and figures. It may be that effective altruism consumed Bankman-Fried’s worldview, or that its brutalist futurism encourages amoral decision-making by members of the tech-capitalist class. But Morris does not succeed in showing that it was the dominant influence.

From Bankman-Fried’s law professor parents, to Peter Thiel, the Zizians (a cult formed from an offshoot effective altruism group, known as the “Rationalists,” that went on a killing spree across the country after growing obsessed about the dangers posed by AI), and Elon Musk, the book targets a wide array of individuals Morris considers malefactors, trying to make the case that effective altruism lies at the root of many problems or bad actors in the United States. Morris spends several chapters jumping from paragraphs about FTX’s collapse, Bankman-Fried’s life, and evidence presented at his trial, to the broader social consequences. The resulting argument’s impact lands more as a shotgun blast than a precision strike.

Nonetheless, Morris’s thesis is still important in understanding part of Bankman-Fried’s modus operandi, as well as that of other tech-capitalists. Some of Silicon Valley’s leading figures, including Thiel and Musk, appear to subscribe to a belief that they and the companies they lead are working to save the world. An instructive parallel case to Bankman-Fried’s fraud at FTX may be Elizabeth Holmes’s Theranos. Holmes was not an adherent of effective altruism, but, like Bankman-Fried, she believed that a “fake it ’til you make it” approach would lead to technological breakthroughs (in her case, in global health) that would benefit not only investors but the world. As Morris and others have pointed out, Silicon Valley’s pressure to innovate, coupled with its emphasis on praising intellectual wunderkinds that the rest of society misunderstands, can lead to dubious moral and legal choices.

The underlying question “Stealing the Future” poses is whether Bankman-Fried is a true believer in effective altruism. Morris goes to considerable lengths to portray Bankman-Fried as the embodiment of EA, as many of its followers call effective altruism. Yet people are so rarely one-dimensional. Bankman-Fried may have been as driven by an addictive gambling personality, which Morris also describes, more than or at least as much as by an effective altruist belief that his fraud would help save the world. It’s impossible to get inside his head.

Bankman-Fried, for his part, has never wavered from maintaining his innocence. At trial, he and his attorneys rejected the notion that FTX was bankrupt at all, arguing instead that the company had suffered a “bank run,” a rapid depletion of the company’s liquidity, similar to those that struck many financial institutions during the Great Depression. Bankman-Fried’s logic was that if the balance sheet revealing FTX’s holdings in Alameda had not leaked, the company would have survived and never gone into bankruptcy. Of course, this account ignores the fact that Bankman-Fried stole consumer funds in the first place to transfer to Alameda.

Morris’s strongest evidence that Bankman-Fried’s devotion to effective altruism led him to rationalize a massive fraud on FTX’s customers is Bankman-Fried’s remarks to the court at his sentencing. In a 20-minute speech to Judge Lewis Kaplan, Bankman-Fried reiterated his defense that FTX would have survived had it not been for the leaked balance sheet. The hail-mary speech, as Morris notes, was steeped in Bankman-Fried’s underlying belief that his actions as FTX’s CEO were justified because their ends were righteous by the lights of effective altruism, regardless of the implications for others.

Judge Kaplan, like the jury, was not moved enough to spare him from a double-digit prison sentence, but Bankman-Fried’s willingness to stake his neck on what he believed rather than on remorse and pleas for mercy is revealing of the moral rot that Morris tries to capture. Now incarcerated, Bankman-Fried has pivoted to attacking “Biden’s SEC” and “Biden’s DOJ” for “throttl[ing]” the cryptocurrency industry. Holmes, currently in the third year of an 11-year prison sentence, has also used intermediaries to share her growing conservative beliefs on X, writing in the aftermath of Charlie Kirk’s assassination: “Everyone might be posting today about Charlie. But I’ll do the same 3-5 years from now.” Barring a pardon, Bankman-Fried’s release is set for 2044.

In the end, the greatest moral of Morris’s tale may lie not so much in the ills of effective altruism as in the powerful appeal of believing our own lies. Bankman-Fried is likely as much a Republican, deregulation stalwart today as he was an effective altruist icon and the movement’s super hero donor before. He may have believed that his fraud at FTX was morally justified by effective altruism’s tenets, but effective altruism may also have been, as with so many justifications for criminal acts, a convenient facade. Tying Bankman-Fried’s crimes solely to the movement ignores the agency of a man who appears willing to contort his beliefs for a pardon today. Unfortunately, that susceptibility to one’s own often self-serving moral narratives is not unique to effective altruists, Silicon Valley, or Bankman-Fried.