In the aftermath of the spectacular implosion of startup cryptocurrency exchange FTX, a quick Google search brings up articles asking questions like “Where Did It All Go Wrong?” and “How Did Everyone Miss The Red Flags?”
For insight into the answers, one need only read an article about FTX’s founder, Sam Bankman-Fried (who goes by “SBF”). Titled “Sam Bankman-Fried Has a Savior Complex — And Maybe You Should Too,” it was — until a few days ago — featured prominently on Sequoia Capital’s website. Sequoia is the fourth-largest venture capital firm in the U.S., and pumped nearly a quarter of a billion dollars into FTX — an investment it has now written off as a complete loss.
Sequoia quietly pulled the article down. But the internet is forever, so diligent folks found it on the Wayback Machine and splattered it all over Twitter.
No wonder Sequoia didn’t want anyone to read it. The article’s author, Adam Fisher, managed to pen 20 pages of pedantic, sycophantic drivel. But many of the answers to the “red flag” questions are there.
Fisher starts by explaining the “Effective Altruism” movement, or “EA,” which we’re told is SBF’s guiding philosophy. A derivation of utilitarianism — “the greatest good for the greatest number” — EA’s young founder Will MacAskill theorizes that one can do the most good by making large sums of money and donating most of it. As MacAskill puts it, “earn to give.”
Bankman-Fried met MacAskill in Cambridge, Massachusetts, in 2013 and was immediately taken with EA. After that meeting, Fisher writes, “SBF’s purpose in life was set: He was going to get filthy rich, for charity’s sake.”
There’s Red Flag No. 1: If you believe someone is only getting “filthy rich” for others’ benefit, you’re easily fooled. Indeed, Fisher acknowledges that SBF left his lucrative trading job because he wanted to be part of something that would enable him to join the “global elite.”
And join he did. Fisher is in awe of the elites who congregate in SBF’s aura, including former British Prime Minister Tony Blair, Bill Clinton, Tom Brady and Gisele Bundchen, Katy Perry and Orlando Bloom. I’m calling these people the “savior class.”
Red Flag No. 2: SBF made his initial money trading cryptocurrency between countries, activities that both implicated a lot of protective rules (citizenship requirements, withdrawal limits, national monetary policies) and “raised every red flag in the book,” including dealing with “fly-by-night Bitcoin exchanges” that moved “from country to country in an attempt to evade all jurisdictional authority.” These are described blithely as mere “operational challenges” and “rickety” structures. “The line between rickety and shady is a little unclear at times,” one of FTX’s employees admitted to Fisher.
It shouldn’t surprise anyone that someone with a cavalier attitude about some regulations will break others — like creating a “back door” within the organization so that you can move billions of dollars of other people’s money over to a trading company run by your girlfriend, as Reuters reported late last week that Bankman-Fried is alleged to have done.
Red Flag No. 3: Everyone in SBF’s orbit is too busy idolizing him to challenge even the most absurd assertions or infantile behavior. In one embarrassingly self-effacing exchange, SBF dismisses all books and films as essentially worthless. Fisher, an author of multiple books, questions his own negative reaction as that of being unworthy in the presence of SBF and his “awesome” and “intimidating” intellect.
What does Bankman-Fried like? Video games.
During his Zoom pitch for millions of dollars from Sequoia, SBF was playing League of Legends while pontificating about wanting FTX to change “the future of money itself.” The venture capitalists’ reactions? “I LOVE THIS FOUNDER”; “YES!!!” (He also plays Storybook Brawl throughout Fisher’s interviews.)
Red Flag No. 4: “Effective altruism” sounds like the self-absorbed secularists’ version of the Prosperity Gospel: just as fraudulent, but with a megalomaniacal twist. Prosperity preachers say, “God wants you to be filthy rich!” EA advocates say, “I’m going to get filthy rich and acquire the power to give everyone else what I decide they need!”
Bankman-Fried has a lot of company among the global elites in the “savior class.” Take, for example, the guilt-ridden gasbags bloviating about climate change while traveling on private jets, acquiring multimillion-dollar homes and dining on expensive delicacies. Meanwhile, the rest of us have to give up our cars and eat insects. Or, as the World Economic Forum advertised a few years ago, we’ll “own nothing and be happy.” We’ll rent everything, you see — from the “savior class,” of course. Like SBF, they’ll get even richer doing it. But their wealth is OK because it’s all for the good of the planet.
That brings me to Red Flag No. 5: It’s not just that SBF’s ends-justify-the-means methodology is ethically challenged; his fundamental premise is wrong. The “money handout” theory of economic development has been definitively disproven (which SBF might know if he’d read a book or two). The best way to raise standards of living for the world’s poor is to help them become self-sufficient and productive, their countries free and prosperous. But that requires economic growth, and would result in the real democratization of wealth. Those in the “savior class” — of which Bankman-Fried is just the latest member — can’t have that.
The “savior class” does not want to share power. And without large numbers of the downtrodden to condescend to, they lose their identity and their sense of self-worth. Their noblesse oblige “altruism” is nothing more than egotism. They worship themselves; they want others to worship them. Fisher’s article proves just how easy that is.
Plenty of us “little people” see the “savior class” for what they truly are: human beings whose puffed-up philosophies and grand plans are riddled with dangerous flaws. When they fail (and they always fail), they take their gullible followers with them. If the deceived are fortunate, it’s only their money they lose. But in the past century, tens of millions of people lost their lives because of philosophies proclaimed by the “savior class” to be brilliant.
You didn’t have to know diddly squat about cryptocurrencies to foretell that this scam would come crashing down. And you don’t need more than common sense to reject the “savior class” and their historic hubris.
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