Saturday 4 November 2023

THE FALL OF CRYPTO KING: A TALE OF TWO MASTERS


 

“Sam Bankman-Fried found guilty of seven counts of fraud in stunning fall for former crypto billionaire” – CNN

Hitting the headlines all over the world lately, the banner story above tells of one of the biggest financial frauds perpetrated in American history. Sam Bankman-Fried (SBF), the “Crypto King,” was found guilty of stealing billions of dollars from accounts belonging to customers of his once-high-flying crypto exchange FTX.

Looking back, SBF, once known as cryptocurrency’s whiz kid, became a financier, established cryptocurrency companies that made billions and backed Effective Altruism (EA) – a movement that seeks to persuade people to donate a large share of their income to charity. For having donated millions, SBF became the EA poster boy.

“By making as much money as we can and donating to the best causes, we can each save hundreds of lives,” argues William MacAskill, an Oxford philosopher and one of the EA founders.

The serendipitous mix of SBF’s driving force to “make money and give it away,” the spiritual nuance of “fall” in the above headline, and the precognition of the top prosecutor’s words -- “The crypto industry might be new. But this kind of corruption is as old as time” -- speaks volumes and gives an inkling to the old-fashioned dilemma of the fallen nature of man flashing back to the time of Jesus Christ.


TWO MASTERS

At this point, let’s take a spiritual trip, briefly, down the hallowed memory lane. Jesus said:

“No one can serve two masters at the same time. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” (Mt. 7:24)

Inspired by EA, SBF claimed that he wanted to make money – billions or maybe even trillions – so that he could do the most good possible – give it all away to the poor. He planned to keep only one percent of his wealth, he told Bloomberg, eventually giving the rest away to worthy causes.

Such a motivation is a two-stage course of action. The first stage is to make money. The second stage is to do good. Cool idea.

Drawn on such a motivation, wittingly or unwittingly, SBF put in place two masters. Money, in the first stage; God-inspired Goodness, in the second stage.

In the first stage, all in good time, according to court filings reported by The Byte, SBF used FTX money to support an incredibly lavish lifestyle for himself and those in his inner circle. He basked in the sunshine of a $35 million penthouse in the Bahamas, spending upwards of $40 million on ultra-luxurious living arrangements, food, and hotels in just nine months alone -- while stealing $13 billion in customer funds to buy real estate and hobnobbing with A-list celebrities like the Clintons, Katy Perry, Orlando Bloom, Jeff Bezos, among others.

However, on the road to the second stage, an ugly head popped up. Nishad Singh, FTX’s former director of engineering and SBF’s onetime roommate, having figured out the $13 billion “hole” in FTX finances – customers deposits SBF used up – he testified:

“I was blindsided and horrified; I felt really betrayed. Something I thought was a beautiful force for good has turned out to be so evil.”

Accumulating so much wealth, SBF stuck around the first stage, putting on the pedestal his Money master. He ultimately lost track of his journey to the second stage, along with shrugging off the God-inspired Goodness master (as the Bible passage forewarns, deep in SBF’s heart, he could have hated or despised such a master in the thick of his accumulated wealth) to do good to poor people. In less than no time, SBF fell from grace and flat on his face, as he came to grips with the court judgment.

It flashes us back to the time of Jesus.

Six days before the Passover, Jesus came to Bethany where he had raised Lazarus, the dead man, to life. Now they gave a dinner for Jesus and while Martha waited on them, Lazarus sat at the table with him.

Then Mary took a pound of costly perfume from genuine nard and anointed the feet of Jesus, wiping them with her hair. And the whole house was filled with the fragrance of the perfume.

Judas, son of Simon Iscariot – the disciple who was to betray Jesus – remarked:

“This perfume could have been sold for three hundred silver coins and turned over to the poor.”

Judas, indeed, had no concern for the poor; he was a thief and as he held the common purse, he used to help himself to the funds. (Jn. 12:1-6)


TWO PEAS IN A POD

From all appearances, Judas and SBF are two peas in a pod. In the same manner, the calculus of Judas words measures up to the credo of Peter Singer, an atheist philosopher, whose ideas lie at the heart of EA, as he argues:

“Effective altruists are sensitive to numbers and to cost per life saved or year of suffering prevented.”

What’s more, Singer has argued that, from a strictly consequentialist perspective, it is plausible that “at least some of the guards at Auschwitz were not acting wrongly” because they might have been replaced “by someone else… who would have been even more brutal.”

Kenan Malik of The Guardian countered that not only does Singer’s logic defy our moral intuitions, but it can also be applied to justify almost any action, including SBF’s fraud. Any EA adherent may stand up for SBF's scamming of the investors, for at least, he gave more money to charity than another scammer might have done. The point: There is more to morality than numbers adding up, and that concepts such as dignity or intrinsic worth may be as important as consequences.

WALK THE TALK

To be fair, EA in its Philippines’ Vision and Mission sounds respectable.

“Our vision is to create a thriving community of Filipinos who use evidence, reason, and compassion to maximize their social impact with their careers and resources.

Our mission is to provide high-quality resources and discussion spaces for Filipino students and professionals to learn about and practice the principles of effective altruism.

We aim to help more Filipinos learn about the importance of maximizing their social impact, which causes could be most important for them to work on, and what they can do with their careers or donations to make an impact on these causes.”

Amid its poster boy’s fall from grace, EA’s port in a storm, badly damaged, may be embedded in the wisdom of this Sunday’s Gospel:

“Therefore, do and observe all things whatsoever they tell you, but do not follow their example. For they preach but they do not practice.” (Mt. 23:3-4)


Head photo collage courtesy of CBC, VOI, & deposit photos

Video clips courtesy of YouTube

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