ZoneBitcoin EditorialThe crypto world was recently shaken to its core by the bankruptcy scandal of cryptocurrency exchange FTX, a once-thriving business run by young billionaire Sam Bankman-Fried. The latter saw his empire collapse overnight, exposing the legitimacy of his actions and his philanthropic actions.
The portrait of an entrepreneur dedicated to the humanist cause
Shortly before the fall of his empire, some people and some media had raised questions about the entrepreneur's real motivations. Considered a " robber baron"Sam Bankman-Fried had heavily emphasized his donations and his philosophical principles based on generosity and philanthropy.
Like Bill Gates with his Bill and Melinda Gates Foundation, he had repeatedly stated that a large portion of his fortune would be donated to charity. At the time of his statements, his fortune was estimated at over $26 billion, making him, at the age of 29, one of the youngest billionaires of the year 2021.
What is Effective Altruism?
Sam Bankman-Fried was initiated by what is called "Effective Altruism", a school of thought whose main representatives are the philosopher Peter singer and the Scottish philosopher Will MacAskill.
Effective altruism is a philosophical and practical approach that seeks to maximize the positive impact of our actions towards others. It is based on the idea that compassion and generosity can be channeled strategically to solve our society's most pressing problems. Thus, effective altruism encourages individuals to rigorously evaluate where their resources, whether financial, intellectual, or temporal, can have the greatest beneficial effect on a given population. By taking this approach, effective altruism reminds us that the help we provide to others can be far more meaningful when we thoughtfully direct it toward the most pressing needs in our world.
So one of Peter Singer's major books is " Animal liberation", published in 1975, which had a profound impact on the animal rights movement and helped raise awareness of the ethical issues surrounding how humans treat nonhuman animals. In this book, Singer argues for the idea that animals have rights and should be treated with compassion and respect. He then questions the practices of the animal industry. meat, animal research, and other areas where animals are exploited.
Criticisms of effective altruism
Criticisms of the effective altruism advocated by Sam Bankman Fried were quickly raised because this is not the first time that crooks surround themselves with ethical values to better operate in the dark.
For many people, this relentless communication of his commitment to effective altruism was seen as a confirmation of his imposture, a convenient alibi for greed and his lust for power. Let us recall in this regard that Sam Bankman-Fried was the second largest donor to the Democratic Party , just behind Soros, in the previous US presidential elections. His contribution was estimated at more than $70 million. His donation to a political party (rather than to a charity) thereby showed his desire to get closer to the sphere of power.
What has been the response from the effective altruism community?
Within effective altruism circles, the implosion of Sam Bankman-Fried and FTX caused a real shock wave.
In an article from Times, it is reported that "several Effective Altsuism (EA) executives were aware of the red flags surrounding Bankman-Fried in 2019. Among the EA masterminds personally briefed on Bankman-Fried's questionable behavior and business ethics were Nick Beckstead, a philosopher who led Bankman-Fried's philanthropic arm, the FTX Future Fund, and Holden Karnofsky, co-CEO of OpenPhilanthropy, a nonprofit that makes grants to support EA causes.
The article claims that, having worked closely with him, MacAskill and Beckstead repeatedly said that Sam Bankman-Fried "was untrustworthy, had inappropriate sexual relationships with subordinates, refused to implement standard business practices and had been caught lying during his first months at the helm of Alameda."
Thus, the founding members of Effective Altruism very quickly dissociated themselves from the founder of FTX and (well before the implosion in 2022) warned about the doubts they had. However, no one took their words seriously because at that time, Sam Bankman-Fried was seen as a young prodigy by the crypto community…
The reaction from the crypto community
The collapse of FTX caused an uproar in the crypto community, with many investors feeling betrayed by Bankman-Fried's promise to make cryptocurrencies ever more popular. In fact, this bankruptcy of FTX even had the opposite effect, namely that of an immense loss of credibility for cryptocurrencies. For example, the SEC hold by --Gary Gensler has tightened its processes and its regulation since the FTX affair qualifying the real "wild west" industry"
Many people today harbor fears and fears regarding their investments in cryptocurrencies. The credibility of the sector as a whole today bears the stigma, considering the bear market which followed, the longest in the history of cryptocurrencies.
Read : Do we know when this bear market will end?
Final word
In a series of tweets following his arrest, Bankman-Fried admitted his mistakes, saying he “screwed up” and “should have done better.” While expressing regret, Bankman-Fried also spent much of the interview deflecting blame, offering explanations for why he shouldn’t be held responsible for FTX customers being unable to withdraw money. Today, that’s all I wish for the platform’s former customers.
The story of Sam Bankman-Fried and the collapse of FTX raises crucial questions about the role of ethics in the crypto industry. As the crypto world continues to recover from this scandal, the future of smooth talkers and entrepreneurs who play the philanthropy card still seems uncertain.
