Effective altruism was used to justify “increasingly absurd and risky” actions at cryptocurrency exchange FTX before its eventual collapse in November 2022, says a former software engineer at Alameda Research.
Speaking to Cointelegraph just days before FTX founder Sam Bankman-Fried’s trial on October 3, Aditya Bharadwaj shared how ideology played a role in the company’s collapse while explaining what it was like to work under the former billionaire’s leadership.
Bharadwaj claimed that effective altruism—which advocates that people earn as much money as possible to donate later—has tipped the scales from reason and driven many corporate decision-making processes toward madness.
“This ideology has been used to justify increasingly risky and ridiculous actions, which frankly should have been viewed with a more rational mind.”
Common throughout Silicon Valley tech circles and New York quantitative finance firms, Bharadwaj said effective altruism was an attractive 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 recovering from the madness of the FTX collapse, I’m ready to tell my story.
Let’s start from the beginning:
— Adi (e/acc) (@aditya_baradwaj) August 23, 2023
“All of us in the company had this vision: ‘I think altruism is good and I think doing things effectively is good.’ So you put those things together and it’s like, ‘Clearly this thing is good,’” he said.
“But the problem is when it veers into an end-justifies-the-means way of thinking, especially when the ends you’re talking about are so outlandish and ridiculous that no rational person could make those decisions.”
Under the guise of effective altruism, Bankman Fried donated millions of dollars to prevent future epidemics and treat malaria in developing countries. In addition, Bankman-Fried was one of the largest donors to the Democratic Party in the United States, but he later admitted to donating to Republicans as well.
As Big Short author Michael Lewis told 60 Minutes recently interviewone idea floated by Bankman-Fried during the final days of FTX was to pay Donald Trump $5 billion not to re-run as president in 2024, because the 31-year-old wants to “protect democracy.”
However, in Bharadwaj’s eyes, Bankman-Fried and the philosophy of altruism were not just an act, he seemed to fundamentally believe in what he stood for.
Bharadwaj explained that despite numerous allegations accusing Bankman-Fried of hiding behind a contrived and altruistic persona, in person he appeared as he portrayed himself in the media.
“He amazed everyone because he was so motivated, he had a mission, he believed in it and he wanted to make it happen,” Bharadwaj said. “He seemed like someone who knew what he was doing, and there was definitely a lot of respect and trust we had in him,” he added.
“That trust ended up being massively abused.”
Bharadwaj said Bankman-Fried’s belief in his supposed altruistic motives may be the reason the former FTX founder has strongly maintained his innocence, after he pleaded “not guilty” to all charges against him despite mounting evidence to the contrary.
Related: How long can Sam Bankman Fred serve in prison? Crypto lawyers weigh in
“I’m sure there’s all kinds of crazy psychological stuff going on in his head that’s probably trying to deal with the facts,” Bharadwaj said. “Maybe he really believes what he did was good or he really believes he didn’t do anything wrong.”
“The truth is important and I think the trial will answer a lot of questions about everything that happened.”
Big questions: What’s up with all the deaths in cryptocurrencies?
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