How Effective Altruism Brokers Helped Make Sam Bankman-Fried
Leading so-called philosophers of the effective altruism movement were warned as early as 2018 that Sam Bankman-Fried was a liar who slept with multiple subordinates, according to new reports from Time. They reportedly responded in part by threatening those who warned that the golden boy was not all he seemed.
Despite official attempts by Alameda Research staff to evict Bankman-Fried at the time, figures such as Oxford professor William MacAskill continued to publicly burnish the image of the FTX founder as he built the one of the greatest financial frauds of all time. MacAskill and others were eventually rewarded for their defense of Bankman-Fried’s behavior in the form of funding and prestige as FTX seemed to succeed in the following years.
This article is excerpted from The Node, CoinDesk’s daily roundup of the most crucial stories in blockchain and crypto news. You can subscribe to take full advantage newsletter here.
These were not dismissed rumors and personal grudges, but well-documented business processes derailed, in part, by people whose entire careers are built on the culture of moral action. In April 2018, four senior Alameda executives called a meeting to offer Bankman-Fried a buyout to leave the hedge fund, based on already significant concerns about his disregard for basic business processes and accounting.
Documents from the meeting described Bankman-Fried as engaging in “gross negligence”, being “unethical” and “stating wrong numbers”. Among other actions leading up to the intervention, Time reports that Bankman-Fried reneged on an agreement to share ownership of Alameda and illegally registered as the sole proprietor.
According to Time, MacAskill was warned about Bankman-Fried’s behavior and the plan to oust him. So did Nick Beckstead, an EA-aligned moral philosopher, and Holden Karnofsky, co-CEO of EA-centric funding platform OpenPhilanthropy.
MacAskill didn’t just dismiss the allegations against Bankman-Fried, but “essentially threatened” those raising the concerns, according to Naia Bouscal, a former software engineer at Alameda.
Because MacAskill was so powerful within the effective altruism movement, and so many Alameda staff members were also part of the movement, his opposition discouraged and blocked those at Alameda who tried to hold Bankman-Fried accountable. from the start. MacAskill, according to a person involved, had the power to influence employment options in the constellation of EA-related nonprofits.
Bankman-Fried reportedly wielded his connection to MacAskill like a cudgel within Alameda. “(Bankman-Fried) was like, ‘I could destroy you,'” one person characterized the Alameda CEO’s behavior to Time. “Will (MacAskill) and Holden (Karnofsy) would believe me rather than you. Nobody’s going to believe you.'”
Apparently, in part thanks to MacAskill’s defense, Bankman-Fried was not forced to resign after the April 2018 meeting. Instead, the four executives who initially raised the concerns left, along with about half of Alameda’s employees at the time.
MacAskill, Karnofsky and Beckstead therefore appear to have played a direct and key role in enabling the FTX fraud – and they were richly rewarded by their pet scammer. After FTX’s explosive growth from 2020 onwards, MacAskill benefited from a wave of interest generated by the supposedly efficient altruistic billionaire he had spent years cultivating. Beckstead would be named head of the FTX Future Fund, a Potemkin nonprofit that helped build Bankman-Fried’s fluffy image — and attract more victims.
The revelations are damning for the individuals involved and for the effective altruism movement as a whole. Although they may not have been privy to the details of Bankman-Fried’s misdeeds, they seem to have been well aware that his supposed moral stance was a fraud. Their alleged refusal to consider allegations of what amounts to sexual abuse in the workplace is particularly despicable.
See also: FTX paid about $2.2 billion to Sam Bankman-Fried
The ideas advanced by MacAskill and his cohort have long been lambasted as a practical fig leaf help predatory capitalists distract others, and themselves, from their exploitative greed. FTX has become the literal instantiation of this theoretical critique, demonstrating a deep rot at the heart of the effective altruism movement – or perhaps more accurately, a paralysis-inducing tumor in its head.
Like all tumors, this one should be excised: MacAskill’s continued presence at Oxford, in particular, is an ugly dripping stain on the face of the whole field of academic philosophy. Unfortunately, the story of FTX has become an object lesson in how rare these diseases are that are actually treated at the top of our society – how freely the cancer of greed and self-dealing has been allowed to spread its tendrils from Oxford to Stanford to MIT. the US Congress, destroying the lives of normal people every step of the way.
CORRECTION (Mar 17, 2023 18:30 UTC): Corrects spelling of William MacAskill’s name.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.