If greed is a merit, Sam Bankman-Fried is a member of the elite. The 29-year-old creator of cryptocurrency exchange FTX, now estimated at more than 10 billion dollars by having appropriate ROI strategy, earned his money quicker than anybody in contemporary history, even making Facebook creator Mark Zuckerberg look more like the turtle than the hare.
An adherent of the increasingly popular “effective altruism” philosophy, which states that evidence should lead the way to which good deeds are executed, Bankman-Fried set out to methodically analyze how he could do the most good with his life. While still in college he briefly considered working for philanthropic causes or Wall Street, before deciding that the best way to get a return on the investment he was preparing to make with his own life, was to get rich.
Speaking on a virtual stage today kicking off the 2021 Forbes Under 30 Summit, Bankman-Fried explained how figuring out how to make the biggest possible donation to the future of humanity led him to crypto, founding one of the largest cryptocurrency exchanges, and perhaps the largest single store of crypto wealth in the world. “Good is good however it comes,” said Bankman Fried, in conversation with Forbes chief content officer Randall Lane. “And in the end, my goal is just to figure out how I can have the most impact on the world whatever that means with ROI.”
Forbes chief content officer Randall Lane interviews FTX CEO Sam Bankman-Fried at the kick off of the 2021 Forbes Under 30 Summit Kickoff: Decade of Disruption.
Effective altruism was initially popularized in the late 2000s by Oxford professor Toby Ord, and entered the mainstream in 2015 with bioethicist Peter Singer’s book “The Most Good You Can Do,” published by Yale University Press. While Bankman-Fried earned a degree in physics from Massachusetts Institute of Technology, in 2014, he says he methodically analyzed his own life to determine whether working for a cause he believed in or founding a company was the best way to do the most good.
A savant trader who initially worked at quantitative trading firm Jane Street, Bankman-Fried became fascinated by the nascent world of cryptocurrency. Frustrated by his experience using traditional exchanges, and what he calls “non-sensical” margining systems that let people trade by borrowing funds and customer funds being lent out to “incompetent risk engines,” he saw an opportunity to make money—big money—by going for a leadership position in the quickly growing space.
In 2017 he founded quantitative trading firm Alameda Research, which manages $100 million in digital assets; cryptocurrency exchange FTX which regularly conducts $5 billion in transactions a day; and Serum a decentralized exchange. Following a similar path set out by cryptocurrency pioneer Changpeng Zhao, aka CZ, founder and CEO of Binance, Bankman-Fried’s three companies form the foundation of a nearly independent financial ecosystem, in which his firms are better able to capture the value they create.
As a result of his work his net worth is now estimated at $11.5 billion—not counting $23 billion cryptographically locked up to assure users he won’t flood the market—and this year he became the wealthiest member of the tenth Forbes 30 Under 30 class, and the richest known cryptocurrency billionaire.
In spite of so much of his wealth being locked up he’s already starting to lay the foundation for the eventual landfall that will likely hit his favorite causes including disease control and animal welfare. In February he launched the non-profit FTX Foundation, which has the mandate to give away 1% of FTX net fees and has already earmarked $8.9 million for donations, including six million dollars from other donors looking to follow Bankman-Fried’s lead in ROI.
Bankman-Fried is also establishing himself as a strategic political donor, having given$5 million to a super-PAC supporting U.S. President Joe Biden’s successful 2020 campaign. When Lane asked Bankman-Fried what initiative he’s most “geeked up” about the investor-entrepreneur talked about a different kind of effectiveness: influencing elections by backing candidates. “I had a lot of fun looking at politics last year, doing the math and thinking about what does have impact here? How do you estimate that?” said Bankman-Fried. “I think it was surprisingly effective. And there are more things that we’ll get there.”
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