12 newyork| february1–14, 2021intelligencer127 minuteswith...Sam Bankman-FriedWho was thatmysteriousBidendonor?
A dispassionate 28-year-oldwith$10billionin crypto.
bybenjaminwallacePhotographbyVictorLlorenteFTXnovelty coin, which he’d been spin-
ning,and a deck of cards, which he’d
beenshuffling. “I’m compulsive,” he said.
Heworea gray hoodie, and his hair was
somewhat less cloudlike than it appears
inmost public photos. Bankman-Fried,
whoshares an apartment with room-
matesand baffled U.S. political observers
withanenormous donation to the Biden
campaignthis past fall, estimates his net
worthat a mostly illiquid $10 billion.
His rapidly attained wealth is the
productof a long-nurtured utilitarian
worldview. The son of public-spirited law
professors at Stanford, Bankman-Fried
wasdrawn early on to the Benthamite
idealofthe greatest good for the great-
estnumber of people. His attempts to
livethephilosophy first found expression
whenheconsidered factory farming: “It’s
a chickenbeing tortured for six to eight
weekssowe can spend half an hour eat-
ingit,” hesaid. “That makes no sense.” (He
becamea vegan.) Later, Bankman-Fried
stumbledupon the Effective Altruism
movement and an offshoot with the credo
“earningto give,” which promotes pursuing
a lucrative career in order to have more
moneyto give away. To that end, after
graduating from MIT, he became a quant
atthetrading firm Jane Street Capital,
whichenabled him to donate to organi-
zationsdevoted to animal welfare and
thepossibly existential threat of artificial
intelligence.
Eventually, Bankman-Fried quit and—
aftera stint working for the Centre for
EffectiveAltruism (a U.K.-based charity)—
becamea full-time investor in crypto, then
aninescapable topic on Wall Street. It was
animmature, inefficient industry, and a
yearafterAlameda’s Japanese trade, he
sensedanother big opportunity to bring
somediscipline to the general chaos of the
marketplace. He moved to Hong Kong in
late 2018 to start FTX.
Untilthen, Bankman-Fried’s involve-
mentwith politics had been limited. In
2012,hehad blogged a little, typing out
NateSilver–inspired thoughts on thedollar value of a single swing vote, and
in 2016, he’d spent a day canvassing in
Pennsylvania, going to the homes of regis-
tered Democrats, expecting cheerful grat-
itude. Instead, “Their eyes would be say-
ing Fuck you,” he recalled. “Those who’d
say anything basically said, ‘I hate both
candidates. I hate that you’re making me
make this choice. I hate that you’re mak-
ing me talk about this. I want my privacy
back. I wish I didn’t live in a swing state.’”
In 2020, Bankman-Fried was in a
position to do a lot more than knock
on doors. After some more math—once
again, he quantified the value of swing
votes and evaluated the most efficient
way to make an impact—he approached
Future Forward USA, a super-pac affili-
ated with the Facebook co-founder
Dustin Moskovitz. Bankman-Fried gave
more than $5 million to Biden and groups
supporting him, which helped fuel a nine-
figure, eleventh-hour blitz of TV advertis-
ing. The transaction—which he says was
motivated less by specific issues than by
the Biden team’s “generic stability and
decision-making process”—landed him
in the No. 2 spot on a Wall Street Journal
list of CEOs backing the candidate.
Being a top donor didn’t bring any
particular perks, never mind an ambassa-
dorship. For his money, Bankman-Fried
took part in a single Zoom event, at which
20 people who didn’t know one another
listened to speeches and took awkwardly
timed stabs at asking questions. He has
never spoken to Biden. “I think it would
be supercool,” he said. “I have a lot of
things to say. There are a lot of things
I could talk his ear off about, but I’m
pretty sure he wouldn’t give a shit.”
On Election Night, when more than
$100 million in bets on the outcome
were placed via FTX’s prediction market,
Bankman-Fried was as nervous as most
Biden voters. Going into the evening, he
thought Trump had a 30 percent chance
of winning. After Miami-Dade County
unexpectedly swung for Trump, he went
to 50-50 “intellectually,” and “emotion-
ally, I was 99 percent sure Trump was
going to win.” (Placing bets on FTX, both
for and against Trump at various points,
he netted a “nontrivial” profit.)
Bankman-Fried doesn’t necessarily see
himself becoming a standing member of
the donor class. It’s entirely possible that
he won’t give money to any politicians
in 2024. “If someone and their twin are
running against each other”—he meant
a conventional race, between two basi-
cally rational centrists—“whatever, may
the best twin win. Obviously, it’s going to
depend a lot on the details.” ■I
n january 2018, Sam Bankman-
Fried, then a mathy 25-year-old
who had recently left Wall Street to
try his hand at buying and selling
cryptocurrency, spotted a fabulous
arbitrage: Because of a faddish surge of
interest in Japan, bitcoin was trading for
10 percent more there than in America.
Much of the rest of the cryptosphere was
distracted by something even shinier—the
30 percent price gap between Korean and
American bitcoin, known as the kimchee
premium. But Korea has a restricted cur-
rency that’s hard to turn back into dollars;
Bankman-Fried had tried to crack that
trade, at one point calculating whether it
made sense to get an airplane, fill it with
people, and fly to Seoul to all buy bitcoin in
person. Instead, he settled for Japan. It was
still complex (or “quite annoying,” in his
words) to execute at scale, but Bankman-
Fried and some friends, with whom he had
founded a trading firm in Berkeley called
Alameda Research, cobbled together a
chain of intermediaries, including obscure
banks in rural Japan, to take advantage of
the monthlong price discrepancy. They
moved up to $25 million a day. “You can
do the math,” said Bankman-Fried. “That
was the craziest trade I’ve ever seen.”
When Bankman-Fried and I spoke
over FaceTime recently, it was 10 p.m. in
Hong Kong. The lights of the city were
visible out the window of his high-rise
office, where he presides over a fledgling
crypto-empire. Alameda, which turns
over $2 billion a day, ranks No. 10 on the
bitmex leaderboard of all-time most-
profitable traders. Bankman-Fried now
spends most of his time building a second
business, called FTX—a high-volume,
low-fee platform for trading derivatives
like options and leveraged tokens—which
Mike Novogratz, the hedge-funder turned
crypto-enthusiast, recently described as
“the most innovative exchange out there.”
Bankman-Fried’s gaze kept off-
screen, and there was a persi lack-
ing sound. I assumed he was answering
emails, until he held up a first-anniversary