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  • FTX Founder Sam Bankman-Fried Sentenced to 25 Years in Prison

    FTX Founder Sam Bankman-Fried Sentenced to 25 Years in Prison

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    A US federal judge in the Southern District of New York has sentenced Sam Bankman-Fried, founder of bankrupt crypto exchange FTX, to 25 years in prison.

    Last November, at the end of a month-long trial, Bankman-Fried—known colloquially as SBF—was found guilty of seven counts of fraud and conspiracy in connection with the collapse of FTX.

    The exchange had fallen to pieces in November 2022 after running dry of funds with which to process customer withdrawals. The money was missing, the jury concluded, because Bankman-Fried had conducted an elaborate fraud whereby billions of dollars’ worth of user funds was swept into a sibling company and used to bankroll high-risk trading, venture bets, debt repayments, personal loans, political donations, and a lavish life in the Bahamas.

    In a court filing, the US government described the affair as “one of the largest financial frauds in history.” Bankman-Fried had demonstrated “unmatched greed and hubris” and a “brazen disrespect for the rule of law,” it said.

    The sentencing completes a remarkable fall from grace. Between 2019 and 2022, Bankman-Fried steered FTX to a $32 billion dollar valuation, becoming for a time the world’s youngest self-made billionaire. The 32-year-old fraternized with regulators, politicians, sports stars, and supermodels. He won the adoration of venture capitalists, who fawned over him, and the media, which lionized him as the “next Warren Buffett” and the “Michael Jordan of crypto.” Privately, Bankman-Fried reportedly told others that he aspired to be the President of the United States.

    For the coming decades, Bankman-Fried will be consigned to a far less illustrious life in prison.

    In considering the appropriate sentence for Bankman-Fried, the judge was required to take into account a blend of factors beyond the details of the underlying crimes. Those include the extent of the financial losses dealt upon the victims, the defendant’s character and history, whether any obstruction of justice had taken place, the likelihood of recidivism, and so forth.

    “The defendant is considered as a whole by the court—for his good and his bad,” says Joshua Naftalis, a former US prosecutor and partner at law firm Pallas Partners. If the objective at trial is to assess a “snapshot” of someone’s behavior, he says, the aim of sentencing is to “take a full measure of the man.”

    The prosecution had requested a sentence of up to 50 years, while Bankman-Fried’s legal counsel had petitioned the court for leniency. Those who cast their client as an “ice-cold manipulator” or “man with no morals,” the defense wrote, “don’t know the true Sam Bankman-Fried.” They emphasized his history of philanthropy, his veganism, and his anhedonia—a condition that ostensibly means he is unable to feel happiness.

    The defense’s court filing was supplemented with letters from Bankman-Fried’s family members and various associates, testifying to his good character, remorse, and utilitarian ideals. “The public perception of Sam could not be further from the truth,” wrote Barbara Fried, his mother. “Being consigned to prison for decades will destroy Sam as surely as would hanging him, because it will take away everything in the world that gives his life meaning.”

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  • The Deaths of Effective Altruism

    The Deaths of Effective Altruism

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    The idea of Singer that excited me was that each of us should give a lot of money to help poor people abroad. His “shallow pond” thought experiment shows why. If you saw a child drowning in a shallow pond, you’d feel obliged to rescue her even if that meant ruining your new shoes. But then, Singer said, you can save the life of a starving child overseas by donating to charity what new shoes would cost. And you can save the life of another child by donating instead of buying a new shirt, and another instead of dining out. The logic of your beliefs requires you to send nearly all your money overseas, where it will go farthest to save the most lives. After all, what could we do with our money that’s more important than saving people’s lives?

    That’s the most famous argument in modern philosophy. It goes well beyond the ideas that lead most decent people to give to charity—that all human lives are valuable, that severe poverty is terrible, and that the better-off have a responsibility to help. The relentless logic of Singer’s “shallow pond” ratchets toward extreme sacrifice. It has inspired some to give almost all their money and even a kidney away.

    In 1998, I wasn’t ready for extreme sacrifice; but at least, I thought, I could find the charities that save the most lives. I started to build a website (now beyond parody) that would showcase the evidence on the best ways to give—that would show altruists, you might say, how to be most effective. And then I went to Indonesia.

    A friend who worked for the World Wildlife Fund had invited me to a party to mark the millennium, so I saved up my starting-professor’s salary and flew off to Bali. My friend’s bungalow, it turned out, was a crash pad for young people working on aid projects across Indonesia and Malaysia, escaping to Bali to get some New Year’s R&R.

    These young aid workers were with Oxfam, Save the Children, some UN organizations. And they were all exhausted. One nut-tan young Dutch fellow told me he slept above the pigs on a remote island and had gotten malaria so many times he’d stop testing. Two weary Brits told of confronting the local toughs they always caught stealing their gear. They all scrubbed up, drank many beers, rested a few days. When we decided to cook a big dinner together, I grabbed my chance for some research.

    “Say you had a million dollars,” I asked when they’d started eating. “Which charity would you give it to?” They looked at me.

    “No, really,” I said, “which charity saves the most lives?”

    “None of them,” said a young Australian woman to laughter. Out came story after story of the daily frustrations of their jobs. Corrupt local officials, clueless charity bosses, the daily grind of cajoling poor people to try something new without pissing them off. By the time we got to dessert, these good people, devoting their young lives to poverty relief, were talking about lying in bed forlorn some nights, hoping their projects were doing more good than harm.

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