July 10, 2024
Effective Altruism and the Downfall of FTX: Former Engineer Sheds Light on Ideological Influence
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Effective Altruism and the Downfall of FTX: Former Engineer Sheds Light on Ideological Influence

Before the crypto exchange FTX’s final collapse in November 2022, a former software engineer at Alameda Research claimed that “increasingly risky and ridiculous” behaviours were justified by effective altruism.

A few days before FTX founder Sam “SBF” Bankman-Fried’s Oct. 3 trial, Aditya Baradwaj discussed how ideology played a part in the company’s demise and described what it was like to have worked under the former billionaire in an interview.

Effective altruism, which encourages individuals to accumulate wealth to give it away later, according to Baradwaj, allegedly tilted the scales away from logic and drove many of the company’s decision-making processes into lunacy.

“This ideology was used to justify increasingly risky and ridiculous actions that, honestly, should have been looked at with a saner mind.”

Aditya Baradwaj, former software engineer at Alameda Research

Effective altruism, according to Baradwaj, is pervasive in Silicon Valley’s tech community and New York City’s quantitative finance firms. It is also an attractive aspect of the corporate cultures at FTX and Alameda Research.

“All of us at the company had this vision of, ‘I think altruism is good, and I think doing things effectively is good.’ So, you put these things together, and it’s like, ‘Obviously, this thing is good,’” he stated.

“But the problem is when it veers into an ends-justify-the-means style of thinking, especially when the ends you’re talking about are just so bizarre and ridiculous that no sane person would make those decisions.”

Aditya Baradwaj

Bankman-Fried contributed millions of dollars to fight malaria in underdeveloped nations and stop future pandemics under the pretence of effective altruism. He was also a prominent supporter of the Democratic Party in the US; however, he subsequently acknowledged supporting Republicans as well.

One of the suggestions made by Bankman-Fried during the closing days of FTX, according to Big Short author Michael Lewis in a recent interview with 60 Minutes, was to pay Donald Trump $5 billion not to seek reelection in 2024 because the 31-year-old wanted to “protect democracy.”

However, Bankman-Fried and the altruistic philosophy weren’t just an act in Baradwaj’s view; he appeared to genuinely believe what he was advocating.

Despite the numerous accusations that Bankman-Fried was concealing himself behind a manufactured, altruistic character, Baradwaj claimed that in person, Bankman-Fried appeared to be exactly how he had been represented in the media.

“He struck everyone as highly motivated, someone who had a mission, who believed in the mission, and who wanted to make that happen,” Baradwaj stated. “He seemed like someone who knew what he was doing, and there was certainly a lot of respect and trust that we had for him.”

“That trust ended up being significantly misused.”

Aditya Baradwaj

Bankman-Fried has steadfastly maintained his innocence, pleading “not guilty” to all of the allegations brought against him despite an increasing body of evidence to the contrary, according to Baradwaj, who said that Bankman-Fried’s trust in his purportedly charitable motivations may be the reason for this.

“The truth is important, and I think the trial is hopefully going to clear up a lot of questions about everything that went down.”

Aditya Baradwaj

“I’m sure there’s all kinds of crazy, psychological stuff going on in his head that is probably trying to cope with the facts. Maybe he does genuinely believe that what he did was fine, or he believes that he did nothing wrong.” Baradwaj concluded.

Image: Wallpapers.com

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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