Summary: Sam Bankman-Fried has said he wants to prevent nuclear war and stop future pandemics, a goal he has promised to use his vast and growing fortune to achieve. But the demise of FTX, and revelations that he had conflated FTX’s assets with those of its clients, has upended those lofty philanthropic goals.
FX168 Financial News (North America) News Sam Bankman-Fried once said that he wanted to prevent nuclear war and stop future epidemics, and he promised to use his large and growing wealth to achieve this goal. But the demise of FTX, and revelations that he had conflated FTX’s assets with those of its clients, has upended those lofty philanthropic goals.
Sam Bankman-Fried's FTX Foundation and its flagship Future Fund, run by idealists who spend the fortunes of their billionaire patrons to make the world a better place, once boasted deep pockets and ambitious goals suddenly There has been a quick turnaround.
Sam Bankman-Fried's fortune disappeared, and the "philosopher" executives who ran the organizations resigned. Former grant recipients are scrambling to raise cash to cover the shortfall and are concerned about the source of FTX's largesse after lawyers for FTX said this week that "substantial" assets were lost and possibly stolen.
Kevin Esvelt, an evolutionary engineer at the Massachusetts Institute of Technology, works on safe advances in biotechnology, including preventing deliberate epidemics. He said he filled out the Future Fund application in one day and got a response in less than two weeks, and he was awarded $1.2 million.
Dr. Kevin Esvelt is now seeking emergency funding for SecureBio, the pandemic defense nonprofit he founded with the grant. He said he was only paying employees with Future Fund bonuses because he didn't think they should lose their jobs because of other people's mistakes. The rest of the money will be set aside until he learns more about where it came from and whether it needs to be recovered.
As recently as this month, Sam Bankman-Fried was estimated to be among the 100 richest people in the world. On Nov. 11, FTX filed for bankruptcy after it lent out billions of dollars in client assets to fund venture capital investments in its sister trading firm. As prosecutors probed FTX, new CEO John J. Ray described the company’s “utter failure of control,” and the exchange’s lawyers said Sam Bankman-Fried ran the company as his “personal fiefdom.”
Sam Bankman-Fried has often claimed that philanthropy was his main motivation for amassing his wealth. "That's the most important thing," he said in an April interview on the "80,000 Hours" podcast.
Sam Bankman-Fried said his law-professor parents instilled in him an interest in utilitarianism, the philosophy of trying to do the greatest good for the greatest number of people. He began to put these ideals into practice while majoring in physics at MIT. Concerned about the suffering of animals on factory farms, he became a vegetarian.
Will MacAskill, then a graduate student in philosophy, sold Sam Bankman-Fried the idea of effective altruism, a way of applying some utilitarian ideas to charitable giving.
"Effective altruists say you should use reason to compare causes and find what will get you the highest return," said Rob Reich, a professor of political science at Stanford University. Charitable donations to elite universities or art museums have far less returns. to donate to anti-malaria nonprofits that aim to prevent easily preventable deaths."
Effective altruists often apply this logic to their own lives, according to Rob Reich. It is not unheard of for believers to donate their kidneys to strangers. Sam Bankman-Fried said in the "80,000 Hours" interview that he considered different career paths, but Will MacAskill suggested that he could do the best thing by making a lot of money and giving it away, which is popular in the community idea.
Sam Bankman-Fried has set his sights on cryptocurrencies, founding trading firm Alameda Research in 2017. A few years later he launched FTX. The surge in the price of bitcoin and other digital currencies has helped FTX become one of the top five cryptocurrency exchanges in the world. He quickly helped establish the FTX Foundation, Future Fund, and a family foundation called Building A Stronger Future. Sam Bankman-Fried said in an April podcast interview that his goal is to give away billions of dollars a year for 10 years.
Causes supported by the FTX Foundation include preventing epidemics and protecting humanity from the potential negative effects of artificial intelligence. At a foundation meeting in July, Mr. Sam Bankman-Fried discussed in depth how bulbs equipped with specific UV frequencies could eradicate airborne pathogens.
The Future Fund opened an open call for thousands of applications in February, with the group promising a quick response and encouraging risk-taking projects. It has attracted scientists to do interdisciplinary work outside their areas of expertise, which has been thwarted by the enormity of government funding. On an FAQ page on its website, Future Fund offers this advice: “We tend to find people who are more niche than ambitious.” Grantees can also choose to pay in dollars or cryptocurrencies.
By September, the Future Fund had committed hundreds of grants worth more than $160 million, according to its website. These investments span a variety of projects, including effective altruism organizations, start-up companies, and "brilliant individuals" pursuing interesting research directions.
Its two largest public grants, $15 million and $13.9 million, went to effective altruism groups for which Will MacAskill is serving. Will MacAskill, now a professor at Oxford University, received no compensation "other than fees" for his involvement with the organizations, one of the spokespeople said.
Will MacAskill sometimes goes beyond advising Sam Bankman-Fried on philanthropic matters. According to documents released in the Twitter lawsuit, when Musk launched the offer to acquire Twitter, Will MacAskill sent the Tesla CEO a text message: "My collaborator Sam Bankman-Fried may be interested in acquiring Twitter for a while. It, and then makes the world a better place.”
The collapse of the Sam Bankman-Fried empire has reverberations far beyond its Bahamian headquarters, to academia and pioneering laboratories around the world. When FTX failed, several recipients, including one connected to Will MacAskill, still owed funds, according to people familiar with the matter.
"We regret to say that it appears that the Future Fund has many promised grants that will not be delivered," the fund's staff wrote in a public resignation letter earlier this month.
News organization ProPublica has been awarded a three-year, $5 million grant from Building A Stronger Future. It supports reporting on biological threats and pandemic preparedness. The news outlet said it secured the first third of its funding in February, but is now looking for other backers to cover the rest.
Will MacAskill distances himself from FTX as it falters. In a series of tweets, he accused Sam Bankman-Fried, one of the departing Future Fund employees, of betraying himself and abandoning the principles of effective altruism.
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