FTX Concepts

Number Go Up: Inside Crypto's Wild Rise and Staggering Fall

by Zeke Faux · 11 Sep 2023 · 385pp · 106,848 words

shaken awake after an all-nighter in the library. He was schlubby and shoeless, in blue shorts and a gray T-shirt advertising his cryptocurrency exchange, FTX. His wild curly hair was so matted down by the headphones he’d been wearing that he resembled a half-sheared sheep. On his

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he said. “It means to be the capital of Bitcoin.” Suarez declared he wanted to pay city employees in Bitcoin, to accept the cryptocurrency as payment for fines and taxes, and even for the city to invest in it. FTX, Sam Bankman-Fried’s crypto exchange, was paying $135 million for the naming rights to

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a way to transfer value without an intermediary, most people weren’t using cryptocurrencies to buy stuff. Instead, they were sending regular money to exchanges, where they could then bet on coin prices. The crypto exchanges, like Bankman-Fried’s FTX, were essentially giant casinos. And many of them, especially in the early

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or spiked. Bitfinex, of course, had lost half its Bitcoins in a hack only a few years earlier. And another one of the largest exchanges, BitMEX, was under U.S. investigation. Word quickly spread among professional crypto traders about the new exchange. FTX was a hit. It had complex derivatives, like tokens

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desk and his shorts stained with soy sauce from lunch. During Bankman-Fried’s catnap, traders swapped about $500 million of Bitcoin, Dogecoin, Tether, and other cryptocurrencies on his exchange, and FTX skimmed off $100,000 in fees. After about an hour, Bankman-Fried stirred, ate a package of Nutter Butters, then

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that problem. By 2020, hackers were taking in more than $600 million worth of crypto a year in ransom payments. Another is hacking exchanges. An exchange like Bitfinex or FTX is like a bank for cryptocurrencies. Each one holds huge sums of coins. And to steal them, a thief doesn’t need

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was completely wiped out. * * * — THE SHOCKING REVERSAL was the biggest news that crypto had ever seen. It was as if Satoshi Nakamoto’s identity was finally revealed—and it was Janet Yellen, the central banker hated by Bitcoiners. FTX’s bankruptcy made the front page of The New York Times. “Sam Bankman

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“It is sort of there prospectively as much as anything else,” he told a reporter. * * * — FTX’S COLLAPSE IN November 2022 marked the end of the great shitcoin boom of 2020 to 2022. All cryptocurrency prices crashed. Bitcoin dropped as low as $16,000, and Solana, one of Bankman-Fried’s favorites, collapsed

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95 percent from its highs. The total value of all cryptocurrencies, which had topped $3 trillion two years earlier, fell below $1 trillion. More companies failed. BlockFi, which had been bailed out by FTX, went

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—and yet shockingly little of use had come of it. Bankman-Fried had discredited the only use anyone had come up with: semi-legal offshore gambling. If you couldn’t even trust the most reputable crypto casino—FTX

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world stomped on crypto, Tether always seemed to skitter away, like some kind of financial cockroach. On November 16, a few days after FTX’s collapse, Giancarlo Devasini returned to El Salvador, where he posed with President Nayib Bukele for a photo at the Casa Presidencial. His partner, Bitcoin artist Valentina Picozzi

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on a cherry picker inspect cryptocurrency mining rigs at the CryptoUniverse mining operation in Nadvoitsy, Russia, in 2021. That year, by some estimates, Bitcoin mining consumed as much energy as the entire country of Argentina, population 46 million. (Andrey Rudakov/Bloomberg) Sam Bankman-Fried, founder of the crypto exchange FTX, in the Bahamas in

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the spring of 2022, a few months after he relocated there. FTX had recently raised funding from venture

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Four crypto companies aired ads during the NFL’s Super Bowl in 2022. FTX’s spot featured Curb Your Enthusiasm’s Larry David as a time-traveling Luddite who scoffs at major inventions in human history—from the wheel, to toilets, to the Walkman. When he’s presented with FTX’s cryptocurrency trading

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Gisele Bündchen at FTX’s Crypto Bahamas conference in April 2022. The unlikely pair also starred in a glossy magazine advertising campaign for FTX. (Joe Schildhorn/BFA.com) Razzlekhan was the rap persona of Heather Morgan. She and her husband were charged with conspiracy to launder $4.5 billion in cryptocurrency in connection

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REFERENCE IN TEXT 31.7 billion Tethers in 2021: “Tether Papers: This Is Exactly Who Acquired 70% of All USDT Ever Issued,” Protos, November 10, 2021. GO TO NOTE REFERENCE IN TEXT $25 billion valuation: Alexander Osipovich, “Crypto Exchange FTX Reaches $

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Lora Kelly, and Cade Metz, “She Was a Little-Known Crypto Trader. Then FTX Collapsed,” New York Times, November 23, 2022. GO TO NOTE REFERENCE IN TEXT “We Do Cryptocurrency Bitcoin Arbitrage”: Sylvie Douglas, “Sam Bankman-Fried and the Spectacular Fall of His Crypto Empire, FTX,” Planet Money, NPR, November 16, 2022. GO TO NOTE REFERENCE

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76 Axie Infinity crash, 124–125, 127 FTX and, 124 increase in user base, 122–123 investors, 165 Lapina and, 121–122 returns from, 124 Smooth Love Potion as official cryptocurrency of, 120 B Back, Jason “Icetoad,” 176–177, 178, 179, 182 Bahamas. See also Crypto Bahamas conference basic facts about, 76

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as de facto CEO of Tether, 137 Faux’s article blasted by, 68–69 first cryptocurrency bubble and, 51 Keiser and Herbert and, 205, 210, 239 loan to FTX refused by, 231 on Madoff, 45 money transfers from Crypto Capital, 61, 62 percent of Tether owned by, 38, 239 Tether’s business model

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud

by Ben McKenzie and Jacob Silverman · 17 Jul 2023 · 329pp · 99,504 words

charts: Number go up. The financial press was practically in lockstep about the inevitable crypto-fied future of money. Politicians, their pockets brimming with donations from industry moguls like Sam Bankman-Fried of FTX, were preaching the Bitcoin gospel. They were also openly contemplating passing industry-written legislation to further legalize these rigged

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in defeat. A valiant effort was made, but there was no sense arguing with the umps (who bore patches on their uniforms for another crypto exchange called FTX). It was over, time to wait out the long winter before spring training. I consoled myself with the fact that at least I wouldn

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that it was hard to trust any offshore crypto entity. Most crypto investors were effectively putting their trust in the people running FTX, Binance, Bitfinex, or any one of the more than 500 exchanges in existence by 2022. While it was possible to hold the cryptocurrencies you owned off an exchange (referred to as

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markets resembled a Ponzi, then everything about the massive marketing campaigns made sense. If the entire crypto market was predicated on getting more regular folks to gamble via exchanges like eToro, Crypto.com, FTX, and Coinbase, then the exchanges had to go all out for the biggest TV audience of the year

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in exchange for an improbably high yield of 20 percent. Terra became a popular stablecoin, with exchanges like Binance marketing it as a safe investment. FTX also listed it. Some South Koreans put their retirement savings into it. In early 2022, Do began to attract attention for both his flippant comments

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fall.) Such a move seemed prudent: Ties between SBF’s business empire and Celsius ran deep. Dirty Bubble Media found that Celsius had allegedly used FTX to buy forty million of its own CEL tokens, then later used the exchange to liquidate millions of dollars of customers’ assets. Celsius’s bankruptcy

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be getting into crypto. Sam decided to gamble bigger. Why not start an exchange? In 2019, FTX was born. Six months after its launch, Changpeng Zhao, the CEO of Binance, reportedly purchased 20 percent of FTX for $100 million. In late 2020 and early 2021, as the market for cryptocurrencies exploded, FTX emerged as an

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called because it raised another $420.69 million from sixty-nine investors (get it?), including the Ontario Teachers’ Pension Plan. Flush with cash, Sam moved FTX and Alameda to the Bahamas. Nassau provided a nice setup, free of the public health restrictions imposed in Hong Kong in response to the COVID

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Bahamas passed the Digital Assets and Registered Exchanges Act (DARE), which set off a gold rush of crypto companies seeking a more favorable business environment. Like Binance, or Crypto.com or many other crypto exchanges, FTX had been playing the game of moving to where the rules of the game were most lax. Why

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shit when it comes to prevarication or outright lying. As sincerely as I could muster, I introduced Sam as the “J. P. Morgan of crypto,” running down a list of FTX’s celeb endorsements, from Tom Brady and Gisele to Steph Curry and Larry David (sigh). I asked him how he explained

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in Solana tokens, to the point where it was jokingly called one of Sam’s coins. (FTX/Alameda was later revealed to own more than fifty million Solana tokens, or $1 billion worth of the cryptocurrency.) Sam had even offered to buy people’s SOL on Twitter to convince others of its

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we are playing with here.” “So most of the political donations I have made are not related to crypto, and this is a complicated, nuanced thing . . .” “In what sense?” “Um, so there’s FTX the company—” “Right . . .” “. . . and there’s Sam the person.” “Right . . .” “And, you know, most of what I’

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try to find some answers. Was anyone in power concerned? And could something be done to stop companies like FTX before they planted their hooks deeper in the mainstream financial system? ° ° ° As the crypto bubble inflated massively during the pandemic, the industry realized that it faced a potentially existential threat: meaningful regulation

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gave $1 million to a PAC linked to GOP leader Mitch McConnell right before the election. Crypto was playing both sides. In April 2022, just days before the crypto collapse kicked off, FTX hosted a crypto conference near their headquarters in the Bahamas, where SBF shared the stage with such luminaries as Bill Clinton

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but rather a money services business, which doesn’t offer customers the same protections. Only the bank accounts from which investors transferred their funds to FTX US were FDIC-insured, not their accounts on the exchange. Implying to retail traders that they would be covered by FDIC insurance was incorrect, and

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potentially dangerous, as the crypto markets continued their months-long decline and some of FTX’s competitors and partners had already declared bankruptcy. On August 18, the FDIC issued a cease-and-desist order claiming

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tweets. But then Sam Bankman-Fried took to Twitter to play damage control, and in a since-deleted Tweet, claimed to “apologize if anyone misinterpreted” FTX’s previous statements. I was pissed, and responded to him, producing a testy back-and-forth. After some jousting, including another tweet he would later

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in all caps—going off the record is done by mutual agreement, and I never agreed—he went into a long, wonkish explanation of how FTX had essentially botched some messaging but never did anything malicious. Eventually, he said, customer accounts would qualify for FDIC insurance, but there was legalese to

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with a heart emoji. For a second I allowed myself to consider that perhaps some progress toward accountability in crypto had been made. But then . . . The day after agreeing with me that FTX had made a mistake, Sam switched registers—“just total honesty here from me”—and warned me that he wouldn

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.” Sam said that battle lines were being drawn, and Binance was trying to take him down. Binance had been one of FTX’s first investors and an industry ally—while crypto was booming, at least. Now, amid mass bankruptcies and a wider economic downturn, something fundamental had changed. Sam seemed genuinely nervous

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for billionaire exchange CEOs. On the day of the midterm elections, in what seemed like the most dramatic period in crypto’s short but tumultuous history, the situation shifted suddenly again. FTX announced that it was selling itself, at a fire-sale price, to Binance. Or at least, the two had signed

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knife and letting him bleed out. At four thirty AM on November 11, under pressure from lawyers, creditors, and colleagues, Sam signed over control of FTX and more than one hundred associated companies. He resigned as CEO, handing over the company to John J. Ray III. Ray was a professional corporate

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its collapse. Twenty years later, the guy who supervised bankruptcy proceedings on behalf of one of the most spectacular frauds in corporate history declared that FTX was even worse. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial

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information as occurred here,” Ray said. He dryly noted that one of FTX’s auditors, Prager Metis, boasted on its website that they were the “first-ever CPA firm to officially open its Metaverse headquarters in the metaverse

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primarily providing market making services. Alameda had been making wild bets, and apparently it wasn’t even very good at it. According to bankruptcy filings, FTX/Alameda lost $3.7 billion before 2022. Quite impressive to lose that much in a bull market! How did Sam’s seemingly massively profitable operation

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the token.” Was everything a confession? Other events surrounding the company gained new context. Remember the “meme round” of investment from October 2021, in which FTX raised $420.69 million from sixty-nine investors? Juvenile humor served to obscure a more unseemly truth. Bankruptcy filings revealed that $300 million of that

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sure there is no fraud or other manipulation. Thank you, Mr. Bankman-Fried, for helping us understand the extensive guardrails a cryptocurrency exchange like FTX has in place to ensure sound crypto spot markets for investors.” Rep. Emmer was hopeful that further discussions might let them proceed with legislation that would allow for

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stole millions of regular Americans’ money. On a Twitter Spaces appearance, with podcaster Ran Neuner, Sam seemed to admit that some of the trades on FTX were fake. Neuner surmised, “You were just letting us buy notional tokens that actually didn’t really exist. . . . That makes sense as to why there

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took a look at Tether’s lending activities, the stablecoin company began issuing defiant statements denouncing the media for calling Tether “sketchy” while overlooking the FTX fraud. The defensiveness was more than a touch ironic: Alameda was Tether’s biggest customer, allegedly sending tens of billions of dollars in exchange for

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of Jean. On Friday, December 2, the DOJ called for an independent examiner to review “substantial and serious allegations of fraud, dishonesty” and “incompetence” at FTX. Criminal prosecutions and serious civil enforcement seemed like real possibilities. Sam didn’t seem to care. He kept giving interviews—and kept up his League

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financial frauds in American history.” More arrests and more charges against Sam’s confederates were all but assured. On December 19, Gary Wang, cofounder of FTX, pleaded guilty to wire fraud and conspiracy to commit wire fraud, commodities fraud, and securities fraud. Caroline Ellison, the CEO of Alameda, admitted to the

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until November 2022, when it fell apart, the CFTC stated that “at the direction of Bankman-Fried and at least one Alameda executive, Alameda used FTX funds, including customer funds, to trade on other digital asset exchanges and to fund a variety of high-risk digital asset industry investments.” Countless civil

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was a feeling in the air that anyone could be next, even Binance. After after a summer of bankruptcies and then FTX’s epic collapse, no company seemed stable. Few crypto executives could—or at least should—be trusted to provide honest statements about the health of their business. The previous few

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’t there. Almost exactly fourteen years later, on December 12, 2022, Sam Bankman-Fried was charged with similar crimes after the crypto markets experienced a similarly precipitous drop, and FTX customers experienced a similar result. The similarities didn’t end there: Madoff ran a legitimate market making business in addition to his

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the site Ultimate Bet, whose parent company employed lawyers Stuart Hoegner, who went on to work for Tether, and Daniel Friedberg, who later worked for FTX. Online poker would eventually resume, and it is now legal in states like Nevada, New Jersey, Pennsylvania, Delaware, West Virginia, and Michigan. But it

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he had swallowed an egg. It was December 14, 2022. I was testifying before the Senate Banking Committee on the collapse of FTX/Alameda and what it meant for crypto, and for the millions of investors who had lost money in the process. On the other end of the panel was Professor

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pleaded guilty to charges of wire fraud, commodities fraud, and securities fraud, as well as money laundering and campaign finance violations. He became the third FTX employee to plead guilty to criminal charges and agree to cooperate with federal prosecutors in their case against their boss. Sam was running out of

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highly lucrative for the insiders participating. According to the filing, Mashinsky walked away with $68.7 million. It wasn’t a particularly sophisticated operation. Like FTX, Celsius used QuickBooks for its accounting. The mechanics of the scheme were an open secret within the company. Again, from the examiner’s report: “In

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1.1 million common shares: Jeremy Hill, “Brady, Gisele, Patriots’ Bob Kraft Among FTX Shareholders Facing Wipeout,” Bloomberg, January 10, 2023. 52 42% of men: Michelle Faverio and Navid Massarat, “46% of Americans who have invested in cryptocurrency say it’s done worse than expected,” Pew Research Center, August 2022. 53 “In

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warning from FDIC to stop ‘misleading’ consumers about deposit protection,” CNBC, Aug. 19, 2022, https://www.cnbc.com/2022/08/19/crypto-firm-ftx-receives-cease-and-desist-from-fdic-about-insurance.html. 218 He slid into my DMs: Direct Messages between Ben McKenzie and Sam Bankman-Fried. 220

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-insolvent. 223 Sam signed over control: MacKenzie Sigalos, “Sam Bankman-Fried steps down as FTX CEO as his crypto exchange files for bankruptcy,” CNBC, November 11, 2022, https://www.cnbc.com/2022/11/11/sam-bankman-frieds-cryptocurrency-exchange-ftx-files-for-bankruptcy.html. 228 “ ‘God Mode’ to short coins . . .”: Alex Mashinsky (@Mashinsky), Twitter

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, https://prospect.org/power/sen-gillibrand-hires-former-crypto-lawyer/. 234 Alameda had invested $11.5 million: Stephen Gandel, “Crypto Firm FTX’s Ownership of a U.S. Bank Raises Questions,” New York Times, November 23, 2022, https://www.nytimes.com/2022/11/23/business/ftx-cryptocurrency-bank.html. 234 SBF was arrested in the

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Bahamas: CFTC complaint against FTX, United States District Court (Southern District of

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New York), December 21, 2022, https://www.cftc.gov/media/8021/enfftxtradingcomplaint122122/download. 237 In January 2023: Giulia Heyward, “Cryptocurrency giant Coin-base strikes a $100 million deal with New York regulators,” NPR

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. Singh pleaded guilty: David Jaffe-Bellany and Matthew Goldstein, “Third Top FTX Executive Pleads Guilty in Fraud Investigation,” New York Times, February 28, 2023. 260 Alex Mashinsky . . . was sued for fraud: press release, “Attorney General James Sues Former CEO of Celsius Cryptocurrency Platform for Defrauding Investors,” NY Attorney General, January 5, 2023

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Commission financial crisis (2008) Financial Times FOMO (fear of missing out) Forbes forex trading Fortune fraud. See specific topics fraud triangle Fried, Barbara Friedberg, Daniel FTX. See also Bankman-Fried, Sam futures contracts Galaxy Investment Partners gambling Garcia, Mario Garlinghouse, Brad The General Theory of Employment, Interest, and Money (Keynes) Gensler

The Mysterious Mr. Nakamoto: A Fifteen-Year Quest to Unmask the Secret Genius Behind Crypto

by Benjamin Wallace · 18 Mar 2025 · 431pp · 116,274 words

bust. In the most recent run-up, a bitcoin had topped a new high of $69,000, and in the most recent collapse, the cryptocurrency exchange FTX had joined the leaderboard of history’s biggest financial frauds. Bitcoiners could justly complain that the scams were unrelated to Bitcoin itself; they were examples, in fact, of

On the Edge: The Art of Risking Everything

by Nate Silver · 12 Aug 2024 · 848pp · 227,015 words

sorts of controversies. Effective altruism came under substantial scrutiny in 2022 following the implosion of the cryptocurrency exchange FTX. Sam Bankman-Fried, FTX’s founder—who I spoke with several times for this book both before and after FTX’s bankruptcy, and who I cover extensively in chapters 6 through 8—identified as an

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EA and promised to commit hundreds of millions of dollars to EA-related causes through the FTX Foundation. I saw firsthand that this was not merely an arm’s-length relationship. When the Oxford philosopher Will MacAskill, one of the most

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and more open-ended problems. The playbill is as follows: Act 1: New Providence Island, the Bahamas, December 2022. I meet with SBF shortly after FTX has imploded and probe his mindset in a darkening penthouse just as he’s gone from ostensibly being worth $26.5 billion to potentially facing

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more questionable. Social media may well have had net-negative effects on society. Crypto gave rise to a lot of scams and cons, like Sam Bankman-Fried’s FTX—heavily invested in by Sequoia and other VC firms—which cost cryptocurrency holders out of at least $10 billion. And with AI, the disruption

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York City courtroom would convict SBF on seven felony counts, finding that FTX had defrauded customers, lenders, and investors by “loaning” billions of dollars of customer deposits to its sister company, Alameda Research, to make risky, losing bets in the cryptocurrency market. I do not mean to suggest that one should be

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the next Musk. Then, on the day of the midterm elections, I began getting texts from a well-connected crypto friend that something was going down at FTX. By the end of the week, FTX had filed for bankruptcy. A week later, I messaged SBF, who was conducting interviews with other reporters. I

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to succeeding in that by many definitions,” he said. SBF’s hypothesis was that once this process started, it would catalyze a virtuous cycle, with FTX gradually earning income from trading fees to fill the $8 billion hole, and perhaps also getting new rounds of investment. “So let’s say you

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nerds? Act 2: Miami, Florida, November–December 2021 I was in a VIP area somewhere deep in the bowels of FTX Arena. It was a happy time for crypto; three weeks earlier, Bitcoin had achieved an all-time-high price (later surpassed in early 2024) of $67,566.83, larger than the average

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also asked Mashinsky about his business model. “So if I deposit my Bitcoin with you, what are you going to do with that Bitcoin?” “I lend it out to FTX. FTX needs liquidity,” he answered instantly. “You can give it [directly] to FTX. Are they gonna pay anything? No. You deposit through me, I’ll

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,” I said, not sure it made any sense at all. “It’s very simple,” Mashinsky replied. What’s clearer is that FTX/Alameda had an appetite for as much crypto as it could get its hands on—and it sometimes borrowed it at interest rates as low as 6 percent from Celsius

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portrayed as a Luddite who scoffed at the invention of the wheel, the Declaration of Independence, and the light bulb. Yes, really: FTX was comparing the invention of crypto to the harnessing of electricity. The tagline at the end of the commercial? It was literally—in all caps—“DON’T MISS OUT

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venture firms had fear of missing out on. A VC firm’s partnership agreement might prevent it from investing in tokens or “weird crypto stuff,” Qureshi said. But FTX was just a regular company run by a credible-seeming American nerd. Dustin Moskovitz, a Facebook cofounder who now runs the workflow software

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would eventually be subpoenaed. *3 U.S. attorneys cited a larger number in their case against SBF: between $10 billion and $14 billion. Larry Neumeister, “FTX Founder Sam Bankman-Fried Convicted of Stealing Billions from Customers and Investors,” USA Today, November 3, 2023, usatoday.com/story/money/2023/11/02/sam

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-bankman-fried-convicted-fraud/71429793007. *4 For the interviews we conducted after FTX’s bankruptcy—one by Zoom, two in the Bahamas, and one in Stanford, California—our agreement was that the material could be used on the

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unpredictable given available evidence,” he said. He cited a forecast from a different play-money prediction market site called Metaculus. “What’s the chance of FTX defaulting on any customer deposit in 2022? It was like one point three percent,” MacAskill recalled. Now, look, maybe it’s fair in some sense

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at Lightcone Infrastructure, the company that runs the rationalist blog LessWrong and owns the Berkeley microcampus that hosted Manifest. He referred to EA before the FTX collapse as the “world’s largest trust bubble”—one that was prone to being taken advantage of by SBF. Further Downriver, where the poker players

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him on that darkening afternoon at Albany, with whether bankruptcy could have been staved off for a little while longer—while also glibly conceding that FTX was more likely than not to go bankrupt eventually? So let’s do some narrowing down. There are basically four theories of the case.

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in the room to help him. He made some critical, unforgivable mistakes, but they were mostly errors of negligence. Deficient SBF was directly responsible for FTX/Alameda’s precarious position. Under his utilitarian philosophy, he believed the ends justified the means and he could be extremely manipulative. However, he was also

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I proposed going into town, but Jacklyn explained that this was too risky—the Bahamas was a small place, and word would get around of FTX employees meeting with a reporter. So instead we ate in the same apartment where I’d interviewed Sam. The Chapskys were nothing like the stereotype

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islands. And with 70 percent of its economy dependent on tourism, the Bahamas was severely affected by COVID-19. The reason the Bahamas gambled on FTX and crypto, these senior officials conveyed, is because the country didn’t have the luxury of not taking high-upside bets. However, the Bahamas isn’t

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Fried, of course, thought the Kelly criterion had you wagering far too little. He thought it was for wimps. In a 2020 Twitter thread, @SBF_FTX explained that most people chicken out too soon. Once they’ve achieved a certain lifestyle, they encounter diminishing returns. Buying a second home if you

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more data is strictly better than less. Satoshi: Either a reference to Satoshi Nakamoto, the pseudonymous creator of Bitcoin, or a satoshi, the smallest denomination of Bitcoin, equal to 0.00000001 BTC. SBF: Felonious FTX founder Sam Bankman-Fried. Scaling (AI): The tendency in machine learning for capabilities to scale upward with the

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, August 25, 2023, linkedin.com/pulse/spacex-profitable-150-billion-net-worth-46-revenue-al-hasan-pmp-. GO TO NOTE REFERENCE IN TEXT cost cryptocurrency holders: Larry Neumeister, “FTX Founder Sam Bankman-Fried Convicted of Stealing Billions from Customers and Investors,” USA Today, November 2, 2023, usatoday.com/story/money/2023/11

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6: Illusion once $32 billion: Jamie Redman, “From a $32 Billion Valuation to Financial Troubles: An In-Depth Look at the Rise and Fall of FTX,” Bitcoin News, November 10, 2022, news.bitcoin.com/from-a-32-billion-valuation-to-financial-troubles-an-in-depth-look-at-the-rise-and-fall-of

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, decrypt.co/200649/u-s-prosecutors-say-sbf-500-million-investment-ai-firm-anthropic-wholly-irrelevant. GO TO NOTE REFERENCE IN TEXT a category FTX: Andrew Cohen, “Crypto Exchange FTX Has Tried Buying Sports Betting App PlayUp for $450 Million,” Sports Business Journal, December 14, 2021, sportsbusinessjournal.com/Daily/Issues/2021/12/14

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/Technology/crypto-exchange-ftx-has-tried-buying-sports-betting-app-playup-for-450-million.aspx. GO TO NOTE REFERENCE IN TEXT surreptitiously in the latter case: Bankman-Fried confirmed

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-donated-millions-in-dark-money.html. GO TO NOTE REFERENCE IN TEXT played video games: David Gura, “What to Know About Sam Bankman-Fried and FTX Before His Crypto Financial Fraud Trial,” NPR, October 2, 2023, sec. Business, npr.org/2023/10/02/1203097238/what-to-know-about-sam-bankman-fried-and

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Revived: The Wall Street Journal,” CoinDesk, January 19, 2023, coindesk.com/business/2023/01/19/new-ftx-head-says-crypto-exchange-could-be-revived-wall-st-journal. GO TO NOTE REFERENCE IN TEXT one of FTX’s subsidiaries: “FTX Digital Markets Ltd. (In Liquidation),” PricewaterhouseCoopers, accessed December 31, 2023, pwc.com/bs/en/services

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NOTE REFERENCE IN TEXT resigned as CEO: MacKenzie Sigalos, “Sam Bankman-Fried Steps down as FTX CEO as His Crypto Exchange Files for Bankruptcy,” CNBC, November 11, 2022, cnbc.com/2022/11/11/sam-bankman-frieds-cryptocurrency-exchange-ftx-files-for-bankruptcy.html. GO TO NOTE REFERENCE IN TEXT nerdy, overconfident, Adderall-popping: William

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Everyone Should Read,” Bernard Marr & Co., July 2, 2021, bernardmarr.com/a-short-history-of-bitcoin-and-crypto-currency-everyone-should-read. GO TO NOTE REFERENCE IN TEXT Heat’s basketball arena: Lora Kelley, “FTX Spent Big on Sports Sponsorships. What Happens Now?,” The New York Times, November 11, 2022, sec. Business, nytimes

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TEXT another $10 million: Joseph Gibson, “We Now Know (Allegedly) How Much Sam Bankman-Fried Paid Tom Brady, Steph Curry and Larry David for Their FTX Endorsements,” Celebrity Net Worth, October 4, 2023, celebritynetworth.com/articles/celebrity/we-now-know-allegedly-how-much-sam-bankman-fried-paid-tom-brady-steph-curry

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/odd-lots-full-transcript-sam-bankman-fried-and-matt-levine-on-crypto.html. GO TO NOTE REFERENCE IN TEXT Celsius had employed: Faux, Number Go Up, 176. GO TO NOTE REFERENCE IN TEXT own dubious token: David Gura, “FTX Made a Cryptocurrency That Brought in Millions. Then It Brought Down the Company,” NPR

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, November 15, 2022, sec. Business, npr.org/2022/11/15/1136641651/ftx-bankruptcy-sam-bankman-fried-ftt-crypto-cryptocurrency-binance. GO TO NOTE REFERENCE IN TEXT of nearly $2 billion

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: Erin Griffith and David Yaffe-Bellany, “Investors Who Put $2 Billion into FTX Face Scrutiny, Too,” The New York Times, November 11, 2022, sec

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. Technology, nytimes.com/2022/11/11/technology/ftx-investors-venture-capital.html. GO

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, dailycoin.com/cz-and-sbf-twitter-fight-reveals-how-they-became-rivals. GO TO NOTE REFERENCE IN TEXT Former U.S. presidents: Lewis Pennock, “Bahamas Crypto Festival Where FTX Boss Welcomed Clinton and Katy Perry,” Mail Online, November 14, 2022, dailymail.co.uk/news/article-11426949/Inside-Bahamas

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-crypto-festival-FTX-CEO-Bankman-Fried-welcomed-Bill-Clinton-Katy-Perry.html. GO TO NOTE REFERENCE IN TEXT Chapter 7: Quantification first three-Michelin-star vegan: “Eleven Madison

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Tries to Explain Himself,” Vox, November 16, 2022, vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy. GO TO NOTE REFERENCE IN TEXT Bankman-Fried had worked: Benjamin Wallace, “The Mysterious Cryptocurrency Magnate Who Became One of Biden’s Biggest Donors,” Intelligencer, February 2, 2021, nymag.com/intelligencer

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Bankman-Fried’s conclusion: James Fanelli, “Sam Bankman-Fried’s Moral Thinking,” The Wall Street Journal, October 11, 2023, wsj.com/livecoverage/sam-bankman-fried-ftx-trial-caroline-ellison/card/sam-bankman-fried-s-moral-thinking-FbKBJQkdl83SlNEUWwiT. GO TO NOTE REFERENCE IN TEXT as “infinite ethics.”: Joe Carlsmith, “Infinite Ethics and

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,” The Guardian, December 27, 2022, sec. Business, theguardian.com/business/2022/dec/27/judge-trump-prince-andrew-trials-sbf-sam-bankman-fried-ftx-cryptocurrency. GO TO NOTE REFERENCE IN TEXT $4 million gray: Sophie Mann, “SBF Arrives at $4m Family Home for Christmas Under House Arrest,” Daily Mail, December

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Curbed,” The New York Times, February 16, 2023, sec. Business, nytimes.com/2023/02/16/business/bankman-fried-crypto-fraud-bail.html. GO TO NOTE REFERENCE IN TEXT back door between FTX: Jamie Crawley, “FTX Employees Knew About the Backdoor to Alameda Months Before Collapse: WSJ,” CoinDesk, October 5, 2023, coindesk.com/policy

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warned SBF: Elizabeth Lopatto, “Sam Bankman-Fried Was a Terrible Boyfriend,” The Verge, October 10, 2023, theverge.com/2023/10/10/23912036/sam-bankman-fried-ftx-caroline-ellison-alameda-research. GO TO NOTE REFERENCE IN TEXT transcript I obtained: I obtained it for a fee. GO TO NOTE REFERENCE IN TEXT

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more like $50k. Why? Because ultimately my utility function isn’t really logarithmic. It’s closer to linear,” Twitter, December 11, 2020, twitter.com/SBF_FTX/status/1337250704075833347. GO TO NOTE REFERENCE IN TEXT actually a misconception: Brad DeLong, “There Are Complex-Number One-Norm Square-Root of Probability Amplitudes of

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(Pope), 478 freeroll (gambling), 485 free speech, 29, 522n French Revolution, 469 frequentism, 481 friction, 167, 485 Friedman, Bill, 162–63 Friedrich, Stephen, 95–96 FTX. See Bankman-Fried, Sam Fukuyama, Francis, 467–69, 471, 489 fungibility, 485 fun players, 485 futurism, 379–80 G Galfond, Phil, 226–27, 233, 234

More Everything Forever: AI Overlords, Space Empires, and Silicon Valley's Crusade to Control the Fate of Humanity

by Adam Becker · 14 Jun 2025 · 381pp · 119,533 words

Bankman-Fried was “the next Warren Buffett.” You probably already know the rest of the story. Sam Bankman-Fried’s cryptocurrency exchange, FTX, imploded in November 2022. He and his lieutenants at FTX used customers’ private account funds to cover trades made by Alameda Research, which Bankman-Fried (aka SBF) and his EA

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gang were still running as a hedge fund alongside the trading firm. When Alameda’s funds crashed with the crypto market in fall 2022, FTX’s customers were left holding the bag, with an estimated $8 billion in customer funds gambled away on bad bets and poured into

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time SBF was committing large-scale financial fraud, he had been donating lavishly to a host of EA organizations. The FTX Future Fund, an arm of FTX’s philanthropic organization with a team composed of MacAskill and other effective altruism luminaries, had given grants to typical EA and longtermist causes

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of dollars to other outlets like ProPublica and Semafor.65 (The grants to Effective Ventures, Vox, ProPublica, and Semafor have since been returned to the FTX estate as part of the ongoing bankruptcy proceedings.) Now, thanks to SBF, the EA community had finally gotten its wish. Effective altruism had broken into

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New York Times, the Atlantic, the New Yorker, the Washington Post, and many others ran similar headlines.67 Some news reports on the implosion of FTX also picked up on stranger facets of SBF and his circle, things that didn’t quite make sense on the face of it. For example

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of the two groups independently of each other. Taken in context, Ellison’s Tumblr posts seem less bizarre and more chilling. She and others at FTX seemed to believe that, in order to save the world, they needed to accumulate wealth and power to steer the future of humanity by sheer

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your core business is bad for the world, in terms of… your ability to work with partners in your philanthropic efforts.” But that November, when FTX was falling down around him, he had another conversation with Piper (this time over Twitter DMs), and she asked him whether that was the real

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on safety, called Anthropic. They made many hires from within the EA community and received half a billion dollars early on from Bankman-Fried’s FTX; Anthropic has since become one of the largest AI companies, with billions in funding from Google and Amazon.76 There is even federal funding for

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money toward, say, malaria nets.24 But effective altruists dismayed by the purchase ultimately got what they wanted, in a way: after returning funds to FTX’s creditors in the wake of Bankman-Fried’s fraud conviction, Effective Ventures decided to put Wytham Abbey up for sale in 2024.25 Yet

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, Peter Singer, Dustin Moskovitz, Ray Kurzweil, David Chalmers, Eliezer Yudkowsky, and the musician Grimes. Ord signed too, as did a notable former member of the FTX Foundation team: one William MacAskill.58 * * * “I was pretty alarmed by Bing.… I was not expecting 2023 to be the year where an AI chatbot

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longtermism from the start. Nick Beckstead, an AI safety consultant, has a long history with longtermism and EA. He was CEO of the FTX Future Fund before FTX imploded in 2022. Before that, he did a stint at FHI in Oxford, followed by a job at Open Philanthropy.67 And before all

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seem to have difficulty forecasting relevant events even on much shorter timescales, as economist Tyler Cowen pointed out in late 2022. “Hardly anyone associated with [FTX] Future Fund saw the existential risk to… Future Fund, even though they were as close to it as one could possibly be. I am thus

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, 2023, https://ourworldindata.org/co2-and-greenhouse-gas-emissions. 61 “Crypto Firm FTX Trading’s Valuation Rises to $18 bln After $900 mln Investment,” Reuters, July 20, 2021, www.reuters.com/technology

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/. 62 Bill Chappell, David Gura, and Lisa Lambert, “Bankman-Fried Is Arrested as Feds Charge Massive Fraud at FTX Crypto Exchange,” NPR, December 13, 2022, www.npr.org/2022/12/12/1142361088/bankman-fried-ceo-ftx-crypto-exchange-arrested-bahamas-charges-sdny; David Gura, “Sam Bankman-Fried Is Found Guilty of All Charges in

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Nam, “Sam Bankman-Fried Sentenced to 25 Years in Prison for His FTX Crimes,” NPR, March 28, 2024, www.npr.org/2024/03/28/1241210300/sam-bankman-fried-ftx-sentencing-crimes-crypto-mogul-greed. 63 Zachary Robinson, “EV Updates: FTX Settlement and the Future of EV,” Effective Altruism Forum, December 13, 2023, https://

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Dylan Matthews, “How Effective Altruism Let Sam Bankman-Fried Happen,” Vox, December 12, 2022, www.vox.com/future-perfect/23500014/effective-altruism-sam-bankman-fried-ftx-crypto. 67 Jennifer Szalai, “How Sam Bankman-Fried Put Effective Altruism on the Defensive,” New York Times, December 9, 2022, www.nytimes.com/2022/12/09

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/books/review/effective-altruism-sam-bankman-fried-crypto.html; Annie Lowrey, “Effective Altruism Committed the Sin It Was Supposed to Correct,” The Atlantic, November 17, 2022, www.theatlantic.com/ideas/archive/2022/11/cryptocurrency-effective-altruism-ftx-sam-bankman-fried/672149/; Gideon Lewis-Kraus, “Sam Bankman-Fried, Effective

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Movement That Shielded Sam Bankman-Fried from Scrutiny,” Washington Post, November 17, 2022, www.washingtonpost.com/technology/2022/11/17/effective-altruism-sam-bankman-fried-ftx-crypto/; Eric Levitz, “Is Effective Altruism to Blame for Sam Bankman-Fried?,” New York, November 16, 2022, https://nymag.com/intelligencer/2022/11/effective-altruism-sam

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-bankman-fried-sbf-ftx-crypto.html; Zeeshan Aleem, “How Sam Bankman-Fried’s Fall Exposes the Perils of Effective Altruism,” MSNBC, December 3, 2022, www.msnbc.com/opinion/msnbc-opinion

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/ftx-sbf-effective-altruism-bankman-fried-rcna59172. 68 David Yaffe-Bellany, Lora Kelley, and Cade Metz, “She Was a Little-Known Crypto Trader. Then FTX Collapsed,” New York Times, November 23, 2022, www.nytimes.com/2022/11/23/business

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/ftx-caroline-ellison-sbf.html. 69 Tarpley Hitt, “Are These Caroline Ellison’s Tumblrs?,” Gawker, November 14, 2022

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_Rationality. 72 Kelsey Piper, “Sam Bankman-Fried Tries to Explain Himself,” Vox, November 16, 2022, www.vox.com/future-perfect/23462333/sam-bankman-fried-ftx-cryptocurrency-effective-altruism-crypto-bahamas-philanthropy. 73 “Transcript of Sam Bankman-Fried’s Interview at the DealBook Summit,” New York Times, December 1, 2022, www.nytimes.com/2022

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-climate-change/. 15 Andrew Watson, private email correspondence, January 25, 2024. 16 See Eric Schliesser, “On What We Owe the Future [No, Not on SBF/FTX!], Part 1,” Digressions&Impressions (blog), November 24, 2022, https://digressionsnimpressions.typepad.com/digressionsimpressions/2022/11/on-what-we-owe-the-future-no-not-on-sbfftx

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for AI Safety—General Support (2022),” Open Philanthropy, November 2022, www.openphilanthropy.org/grants/center-for-ai-safety-general-support/; Jonathan Randles and Steven Church, “FTX Is Probing $6.5 Million Paid to Leading Nonprofit Group on AI Safety,” Bloomberg, October 25, 2023, www.bloomberg.com/news/articles/2023-10-25

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.com/index.html%3Fp=32.html; “Future Fund,” Effective Altruism Forum, last modified June 21, 2023, https://forum.effectivealtruism.org/topics/future-fund; Nicholas Kulish, “FTX’s Collapse Casts a Pall on a Philanthropy Movement,” New York Times, November 13, 2022, updated November 14, 2022, www.nytimes.com/2022/11/13

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/business/ftx-effective-altruism.html. 59 Ord interview. 60 Ibid. Here’s one of the surveys he’s talking about: Zach Stein-Perlman and Katja Grace, “2022

The Age of Extraction: How Tech Platforms Conquered the Economy and Threaten Our Future Prosperity

by Tim Wu · 4 Nov 2025 · 246pp · 65,143 words

11,196 years in prison.[7] The story repeated itself in 2022, when Sam Bankman-Fried (also known as SBF), the young operator of the FTX exchange, was found with his hands deep in the piggy bank. Among other things, Bankman-Fried had created his own currency and used client funds

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(Galloway), 71 Fragile by Design (Calomiris/Haber), 145 Freddie Mac, 111 Frederick, Prince (of Denmark), 127–29 FreeMap Israel, 45 Freud, Sigmund, 3, 77–78 FTX exchange, 149 Fujitsu, 32–33 Fukuyama, Francis, 117, 127 G Gaddafi, Muammar, 124 GAFAM (Google, Apple, Facebook, Amazon, Microsoft), 71 Galbraith, John Kenneth, 137–

Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis

by Scott Patterson · 5 Jun 2023 · 289pp · 95,046 words

of a sprawling crypto empire, started snapping up struggling crypto exchanges from Canada to Japan. Seeking to boost popular interest in crypto, the mercurial CEO of cryptocurrency exchange FTX Trading

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, make sure the Earth works.” Bankman-Fried, for his part, went a long way toward making Taleb’s case that cryptocurrencies are a cash-incinerating house of cards when his exchange, FTX, imploded in late 2022. Unnerved by rumors of a liquidity crunch at the exchange, its customers rushed to pull their

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cash out. Within days, FTX’s funds spiraled from billions of dollars in the bank to essentially zero (or, in fact, negative

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billions of dollars). One day FTX was estimated to be worth $32 billion. The following day it was worth virtually nothing. It was a harsh lesson for young Bankman-Fried in

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turned out, of course, that much of Bankman-Fried’s woes appeared self-inflicted amid allegations that he had scampered off with the funds of FTX customers. (Bankman-Fried denied the allegations and plead not guilty at his arraignment in New York.) The long-term future for the effective altruist, by

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to Save Crypto,” Wall Street Journal, August 23, 2022, https://www.wsj.com/articles/crypto-bitcoin-ftx-bankman-fried-11661206532. Since saving the human race is

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Randomness (Taleb), 13, 69–70, 72, 78, 103, 218 Freddie Mac, 3, 80, 109 Freedom House, 256 Freefall, 14 Friedman, Thomas, 19 Friedman, Milton, 226 FTX Trading, 281, 284 Fukushima disaster, Japan, 191–92 Funhouse, 3 Futureset, 267 Galleon Group, 55 Gates, Bill, 124, 251, 281, 282 Gauss, Carl Friedrich, 74

Battle for the Bird: Jack Dorsey, Elon Musk, and the $44 Billion Fight for Twitter's Soul

by Kurt Wagner · 20 Feb 2024 · 332pp · 127,754 words

, wrote Musk that he was “the hero Gotham needs,” and even Sam Bankman-Fried, the CEO of the cryptocurrency exchange FTX, reached out to try to set up a meeting. (Within eighteen months, FTX would crash and Bankman-Fried would be convicted on seven counts of fraud, conspiracy, and money laundering.) No one

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and one of the industry’s most well-connected money guys, sent Musk a message about meeting with Sam Bankman-Fried, who was running the crypto exchange FTX. He’s an “Ultra Genius and doer builder,” Grimes claimed, and more importantly, he was very interested in working with Musk. “It could get

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7 Counts of Fraud and Conspiracy,” New York Times, November 2, 2023, https://www.nytimes.com/2023/11/02/technology/sam-bankman-fried-fraud-trial-ftx.html. later bought the very first Tesla Model S: Anna Mazarakis and Alyson Shontell, “How a Steak Dinner with Elon Musk in 2008 Scored This

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, 271, 275, 278, 284, 288 Fridman, Lex, 277, 279 Friedberg, David, 282 FriendFeed, 158 Frohnhoefer, Eric, 261–62 FTC, 177, 207, 208, 258–60, 281 FTX, 174, 185 Fuentes, Nick, 284 G Gadde, Vijaya, 37, 46, 53, 54, 60, 84, 117, 128–29, 132, 172–73, 192, 199 Biden laptop story

The Great Wave: The Era of Radical Disruption and the Rise of the Outsider

by Michiko Kakutani · 20 Feb 2024 · 262pp · 69,328 words

criminal exploitation, and that investing in a currency which possesses no intrinsic value is extremely hazardous—a warning underscored by the spectacular crash of the cryptocurrency exchange FTX in the fall of 2022. Blockchain, advocates contend, has the potential to disrupt industries from e-commerce to music sales to health care by

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No Place for Investors to Hide,” CNN Business, Nov. 10, 2022, cnn.com/2022/11/10/investing/bitcoin-crypto-ftx-gold. GO TO NOTE REFERENCE IN TEXT “associations of a

Billionaire, Nerd, Savior, King: Bill Gates and His Quest to Shape Our World

by Anupreeta Das · 12 Aug 2024 · 315pp · 115,894 words

the eyes of a Steve Jobs or a Bill Gates.”25 Once the nerd-philosopher-genius-king of the cryptocurrency industry before his nosedive into disgrace, Sam Bankman-Fried, the founder of crypto exchange FTX, grew his empire rapidly on the back of $2 billion raised from investors; at its peak, the start

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,” which uses metrics and evidence to determine where a dollar will do the maximum good. Before his downfall, Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, was one of the more high-profile so-called effective altruists, talking about his philosophy often in public and using his philanthropic activities to build

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FTX’s reputation. The movement, which owes its origin to the philosopher Peter Singer, takes an unsentimental, utilitarian approach to charitable giving—essentially applying quantitative standards

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in foundation, 5, 149–150 wealth of, 45, 263 see also Pivotal Ventures Friedman, Alex, 192 Friedman, David, 139, 270 FTC, see Federal Trade Commission FTX, 50, 205 GameStop, 250 gaming, 51 Garfield, Leonard, 67 Gashugi, Dushime, 9–14 Gates, Bill cameo appearances of, 52, 94 divorce, 129, 148–153, 162