“No sane person would make those decisions,” says a former engineer at Alameda Research about what ultimately led to the collapse of Sam Bankman-Fried’s crypto empire.
Effective altruism was used to justify “increasingly risky and ridiculous” actions at crypto exchange FTX prior to its ultimate collapse in November 2022, says a former software engineer at Alameda Research.
Speaking to Cointelegraph just days before FTX founder Sam Bankman-Fried’s Oct. 3 trial, Aditya Baradwaj shared how the ideology played a role in the company’s collapse while explaining what it was like to work under the former billionaire.
Baradwaj claimed that effective altruism — which advocates that people make as much money as possible to give it away later — tipped the scales from reason and moved many of the decision-making processes at the company toward insanity.
“This ideology was used to justify increasingly risky and ridiculous actions that honestly, should have been looked at with a saner mind.”
Prevalent throughout the tech circles of Silicon Valley and quantitative finance firms in New York, Baradwaj said effective altruism was an alluring and integral part of the cultural DNA at FTX and Alameda Research.
As an engineer at Alameda Research, I had my entire life savings stolen from me by my former boss: Sam Bankman-Fried.
Now, after months of recuperation from the craziness of the FTX collapse, I’m ready to tell my story.
Let’s start at the beginning:
(1/25) #SBF #FTX pic.twitter.com/x5wKvT0Dy2
— Adi (e/acc) (@aditya_baradwaj) August 23, 2023
“All of us at the company had this vision of ‘I think altruism is good and I think doing things effectively is good.’ So you put these things together and it’s like, ‘obviously this thing is good,’” he said.
“But the problem is when it veers into an ends-justify-the-means style of thinking, especially when the ends you’re talking about are just so bizarre and ridiculous that no sane person would make those decisions.”
Under the guise of effective altruism, Bankman-Fried donated millions of dollars to prevent future pandemics and cure malaria in developing countries. Additionally, Bankman-Fried was one of the top donors to the Democratic party in the United States, however, he later admitted to donating to Republicans as well.
As Big Short author Michael Lewis told 60 minutes in a recent interview, one of the ideas being floated by Bankman-Fried during the final days of FTX was paying Donald Trump $5 billion not to re-run as president in 2024, because the 31-year-old wished to “protect democracy.”
However, in Baradwaj’s eyes, Bankman-Fried and the altruistic philosophy wasn’t an act — he seemed to fundamentally believe what he was espousing.
Baradwaj explained that despite the many allegations which accused Bankman-Fried of hiding behind a fabricated, altruistic persona, in person, he came across exactly as he portrayed himself in the media.
“He struck everyone as highly motivated, someone who had a mission, who believed in the mission and who wanted to make that happen,” Baradwaj said. “He seemed like someone who knew what he was doing and there was certainly a lot of respect and trust that we had for him.”
“That trust ended up being significantly misused.”
Baradwaj said Bankman-Fried’s belief in his supposedly altruistic motives may be why the former FTX founder has staunchly maintained his innocence, having pled “not guilty” to all of the charges pressed against him despite a mounting pile of evidence to the contrary.
Related: How long could Sam Bankman-Fried go to jail for? Crypto lawyers weigh in
“I’m sure there’s all kinds of crazy, psychological stuff going on in his head that are probably trying to cope with the facts,” Baradwaj said. “Maybe he does genuinely believe that what he did was fine or he actually believes that he did nothing wrong.”
“The truth is important and I think the trial is hopefully going to clear up a lot of questions about everything that went down.”
Big Questions: What’s with all the crypto deaths?
