Reviews |  At what stage of capitalism is Sam Bankman-Fried?

Reviews | At what stage of capitalism is Sam Bankman-Fried?

And he promised to give away that magic internet money just as quickly: to the Democrats, for whom he was the second largest donor in the mid-term round and to whom he nonchalantly promised up to $1 billion by 2024; work on pandemic prevention policies; to journalistic start-ups and a whole host of causes affiliated with “effective altruism,” a movement dedicated to doing the most good in the world. In just three years after its founding, FTX has gone from zero to a $32 billion valuation and, along the way, seemed to provide every progressive millennial with a potential sugar daddy.

It was a fantasy, as anyone looking closely at the time could tell you. But it was very tempting to believe, and no one was trying to look that closely, it turns out – not the editors who put it on the covers of Forbes and Fortune; not the merchants who have trusted it with billions in daily trading volumes; not the recipients of his philanthropic promises, many of which will no longer be kept; and most importantly, not the investors who handed him millions without even bothering to check the books.

As recently as July 2021, FTX raised $900 million from, among others, Sequoia Capital, Daniel Loeb’s Third Point and SoftBank Vision Fund, which had previously written off billions of dollars in investments in Uber. and WeWork. In January, a Series C round raised another $400 million. How superficially did they all review their investments, many of which were in the hundreds of millions of dollars? In a now-legendary profile posted on Sequoia’s website just weeks before the collapse, nearly every paragraph contained what should have been a red flag, but was instead presented as a mark of Bankman-Fried’s particular genius. – and Sequoia, for approving it. When, during a pitch meeting, Bankman-Fried described his vision of FTX as a market for everything, including bananas, while participating in a League of Legends video game “gank” (short for gang kill) in another window, the assembly the investors go crazy: “I LOVE THIS FOUNDER”, we write in the Zoom chat. “10 OF 10!” another tap. What stage of capitalism are we at?

Six months ago, Bankman-Fried looked to the outside world as a mix of George Soros and Bill Gates, Laurene Powell Jobs and Leonard Leo. Now the comparisons are less flattering: to Bernie Madoff, of course, and Elizabeth Holmes of Theranos, even though Bankman-Fried hasn’t been charged with any crime; also to Adam Neumann of WeWork, Travis Kalanick of Uber and the other emblematic start-up peddlers of this strange era of venture capital. But these founders were, for all their delusions and sociopathy, pitch-deck visionaries — persuasive proselytes for not just new products, but whole new worlds that could simply be invested in creation.

In his self-presentation, Bankman-Fried seemed to launch something else: an outward indifference bordering on disdain. His earnest commitment to effective altruism underscored the impression that if he only earned his billions to give away, he represented a very different case study in the morality or moral potential of unregulated markets. When, in an interview on Bloomberg’s “Odd Lots” podcast this spring, he flatly described crypto markets as wasteful speculation bordering on fraud – one of the interviewers paraphrased Bankman-Fried’s summary as “I’m in the Ponzi business, and that’s pretty good” — it wasn’t a faux pas. It was part of his DGAF brand, like the sloppy hair and cargo shorts he wore on stage alongside of Bill Clinton and Tony Blair. You may remember someone like him in your college dorm, but in the world of big money, he was a real new archetype: a superior Gen X slacker and a world-changing millennial.In his first interview since retiring from FTX, he casually told The Times’ David Yaffe-Bellany, “It could be worse.”

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