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October 7 - December 7, 2023
Inside of three years, it appeared, Sam Bankman-Fried had created a business so valuable that his share of it implied that he was now the richest person in the world under the age of thirty.
They didn’t know that inside Sam’s mind was a dial, with zero on one end and one hundred on the other. All he had done, when he said yes, was to assign some non-zero probability to the proposed use of his time. The dial would swing wildly as he calculated and recalculated the expected value of each commitment, right up until the moment he honored it or didn’t.
He didn’t mean to be rude. He didn’t mean to create chaos in other people’s lives. He was just moving through the world in the only way he knew how. The cost this implied for others simply never entered his calculations.
When you had $22.5 billion, people really, really wanted to be your friend. They’d forgive you anything. Their desire freed you up from having to pay attention to them, which was good, because Sam had only so much attention to give.
Sam had agreed to pay Tom Brady $55 million, and his then-wife, Gisele Bündchen, another $19.8 million, for twenty hours of their time each, over the next three years.
The Bankman-Frieds weren’t big on the usual holidays. They celebrated Hanukkah but with so little enthusiasm that one year they simply forgot it, and, realizing that none of them cared, stopped celebrating anything. “It was like, ‘Alright, who was bothered by this fact? The fact that we forgot Hanukkah.’ No one raised their hand,” Sam said. They didn’t do birthdays, either. Sam didn’t feel the slightest bit deprived.
In his twenties Sam would learn that his parents had never married. In silent protest of the fact that their gay friends could not legally marry, they’d joined in a civil union.
God—or rather the fact that anyone believed in him—rocked Sam’s world. Just sideswiped his view of other people and what was going on inside their minds. He tried to confront adults—mainly friends of his parents’ who came to dinner—about God.
From the widespread belief in God, and Santa, Sam drew a conclusion: it was possible for almost everyone to be self-evidently wrong about something. “Mass delusions are a property of the world, as it turns out,”
The very first question on the final exam set him off. What’s the difference between art and entertainment? “It’s a bullshit distinction dreamed up by academics trying to justify the existence of their jobs,” wrote Sam, and handed the exam back.
He felt nothing in the presence of art. He found religion absurd. He thought both right-wing and left-wing political opinions kind of dumb, less a consequence of thought than of their holder’s tribal identity. He and his family ignored the rituals that punctuated most people’s existence. He didn’t even celebrate his own birthday. What gave pleasure and solace and a sense of belonging to others left Sam cold. When the Bankman-Frieds traveled to Europe, Sam realized that he was just staring at a lot of old buildings for no particular reason.
Around the time he stopped reading books, he turned to utilitarian message boards on the internet. He might not have felt connections to individual people, but that only made it easier for him to consider the interests of humanity as a whole.
The puzzles that the Jane Street traders gave Sam to solve were designed, like the betting games, to expose blind spots in his mind. The one about baseball was the simplest example. What are the odds that I have a relative who is a professional baseball player? one of the Jane Street traders had asked him. Sam’s first thought was to define the problem. If you didn’t define the problem, you couldn’t solve it.
The argument that MacAskill put to Sam and a small group of Harvard students in the fall of 2012 went roughly as follows: you, student at an elite university, will spend roughly eighty thousand hours of your life working. If you are the sort of person who wants to “do good” in the world, what is the most effective way to spend those hours? It sounded like a question to which there were only qualitative answers, but MacAskill framed it in quantitative terms. He suggested that the students judge the effectiveness of their lives by counting the number of lives they saved during those eighty
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“What had been a three-hundred-million-dollar profit for Jane Street was now a three-hundred-million-dollar loss,” said Sam. “It went from single most profitable to single worst trade in Jane Street history.” Plus Donald Trump was now president of the United States, a fact that did not please Sam or anyone else he knew at Jane Street. “The universe was a cruel joke,” he said.
Between the summer of 2014, when he started at Jane Street, and the summer of 2017, he’d taken no vacation. He’d actually worked ten days when US markets were closed—the action in foreign markets was especially great when US traders weren’t paying attention—and so on the Jane Street books he had taken negative vacation days.
He didn’t actually believe that it was lost, or that they should account for it as lost. He told his fellow managers that in his estimation there was an 80 percent chance that it would eventually turn up. Thus they should count themselves as still having 80 percent of it. To which one of his fellow managers replied: After the fact, if we never get any of the Ripple back, no one is going to say it is reasonable for us to have said we have eighty percent of the Ripple. Everyone is just going to say we lied to them. We’ll be accused by our investors of fraud.
At least some of his fellow effective altruists aimed to bankrupt Sam, almost as a service to humanity, so that he might never be allowed to trade again.
As it turned out, the people who set out to eliminate financial intermediaries simply created some new ones of their own, including, by early 2019, two hundred fifty-four crypto exchanges.
The whole thing was odd: these people joined together by their fear of trust erected a parallel financial system that required more trust from its users than did the traditional financial system. Outside the law, and often hostile to it, they discovered many ways to run afoul of it.
If CZ ever had an original thought he never expressed it, and he seemed to feel his way to his decisions. Sam thought about the size of the pie, while CZ cared more about the size of his piece.
The pseuds would seek common ground with the original crypto religionists by exhibiting their excitement about the technology. The blockchain! The blockchain is going to change . . . everything, they’d say, and hope that would suffice. A religion based on hating banks and government
He’d built a casino that offered gamblers the chance to make bets bigger than their bank accounts justified, at seemingly no risk to the casino or to the other gamblers, and it was exactly what the crypto world wanted.
“There was a dog whistle coming out of Bitcoin that attracted these people,” he said. “They worked in some regular company but on the side they had this interest. They wanted to talk about how they are afraid of government. A lot of times their spouse or their family didn’t want to hear about it anymore.”
He would also message one of Musk’s financial advisors to say he’d be willing to invest $5 billion if Musk was willing to move Twitter onto a blockchain.
Some people cannot articulate a single thing the CFO is supposed to do. They’ll say ‘keep track of the money,’ or ‘make projections.’ I’m like, What the fuck do you think I do all day? You think I don’t know how much money we have?”
Along with his brother, Sam had looked at the world and decided that two EA-related causes made more sense to address with his money than any of the others. And that a lot of the money needed to be sneaky. Their first, less sneaky initiative was pandemic prevention.
So that voters would not know where the money had come from, this bucket would be largely controlled by Mitch McConnell, or friends of Mitch McConnell. So that the disguise would be legal, Sam and McConnell would not talk about how the bucket would be used. But the bucket was very much the subtext of the dinner Sam was headed to, because in McConnell, Sam had found someone as interested as he was in another existential threat to humanity: Donald Trump.
At that moment, Sam was planning to give $15–$30 million to McConnell to defeat the Trumpier candidates in the US Senate races. On a separate front, he explained to me, as the plane descended into Washington, DC, he was exploring the legality of paying Donald Trump himself not to run for president. His team had somehow created a back channel into the Trump operation and returned with the not terribly earth-shattering news that Donald Trump might indeed have his price: $5 billion.
Once you’re in the argument, however, you’ll find it difficult to escape a certain logic: the expected value of reducing even the minuscule likelihood of an existential threat to all future human beings is far greater than the expected value of anything you might do to save the lives of the people who currently happen to be alive.
Effective altruism never got its emotional charge from the places that charged ordinary philanthropy. It was always fueled by a cool lust for the most logical way to lead a good life.
As it turned out, it wasn’t easy to get people to give you $7 billion when you couldn’t explain why you needed it. It was even harder to get people to give you $7 billion when you had to have it right away. Lots of people were willing to talk to Sam and Can and Ramnik, but all of them had the same question: Where did the customer deposits go? When that question went unanswered, everyone who had $7 billion lying around lost interest.
Christina Rolle didn’t think Sam was going to run, and she didn’t think he was hiding billions. Her biggest worry about him was that when she asked him questions, he wouldn’t give her straight answers. “I don’t think he knows why people don’t trust him,” she said. “It’s not hard to see you are being played by him, like a board game.”
The $8.8 billion that should not have been inside Alameda Research was not exactly a rounding error. But it was, possibly, not enough to worry about. As Sam put it: “I didn’t ask, like, ‘How many dollars do we have?’ It felt to us that Alameda had infinity dollars.”
Inevitably, word had got out that the effective altruists took a principled stand against monogamy. After that, a rumor spread that they spent half their time in the Orchid penthouse finding new ways to have sex with each other.
“Five million a year, for three years,” I said. For some tweets and autographs. From a Shark Tank person. And not even the most famous Shark Tank person. Maybe not even the second-most famous Shark Tank person.
Before he’d hit Send, he’d landed in an argument with his mother about what he planned to say. The opening of his testimony included the sentence “I fucked up.” You cannot say “fuck” to a US congressional committee, argued Barbara.
Manfred was Sam’s stuffed animal. He’d had it since birth and refused any substitutes, and so Manfred was about to turn thirty-one years old. She’d first seen Manfred in Hong Kong—Sam had brought it with him from Berkeley. Even then, Manfred was so old and worn it was hard to determine his species. Might have been a dog, could have been a bear. Manfred had made the journey from Hong Kong to the Bahamas and, Constance assumed, might soon be going to jail. Sam liked having Manfred around that much.
Ray was inching toward an answer to the question I’d been asking from the day of the collapse: Where did all that money go? The answer was: nowhere. It was still there.
