The sudden implosion of cryptocurrency exchange FTX has brought scrutiny to political donations made by its co-founder Sam Bankman-Fried. Before his fortunes collapsed along with FTX this month, he was the second-biggest donor to Democrats and liberal groups after only George Soros. Having once boasted wild intentions to pledge $1 billion a year to Democrats, Bankman-Fried ultimately gave $37 million to the party over the midterms, as well as a much smaller amount to moderate Republicans who bucked the GOP in various ways. Other FTX officials donated millions, as well, not least Caroline Ellison, Bankman-Fried’s polycule partner and CEO of FTX-affiliated crypto trading firm Alameda Research. Now that the Securities and Exchange Commission and the Department of Justice are investigating the alleged fraud that led to a bank run and liquidity crisis that forced FTX to file for bankruptcy, recipients of the sullied contributions have grown quiet. A few are reportedly considering returning the funds or donating any unspent portion to charity.
Given the scale of his giving, Bankman-Fried’s downfall has also cast a cold light on effective altruism, a social and philosophical movement that takes an actionable, evidence-based approach to maximizing the public good, which purportedly guided his philanthropy. The movement traces its intellectual roots to the utilitarian ethics of philosopher Peter Singer and thinkers who arose from LessWrong, an online forum for self-described “rationalists” who apply Bayesian logic to pretty much everything, as if all complex moral quandaries can be solved for X. You can see why such a philosophy might appeal to a growing number of tech elites.
Crypto has long been associated with rightwing politics. Before going quiet a decade ago, Bitcoin’s pseudonymous creator, Satoshi Nakamoto, wrote that Bitcoin is “very attractive to the libertarian viewpoint,” which proved true. MAGA Republicans, such as Josh Mandel, have made more nationalist and paleoconservative cases for Bitcoin, while establishment Republicans like Sen. Ted Cruz and Gov. Greg Abbott, both of Texas, promised to make the Lone Star State the center of the blockchain industry. Given such associations, regularly commented on in liberal media, Bankman-Fried’s allegiance to the Democrats might seem surprising. But multibillion-dollar valuations and IPOs have helped large crypto exchanges and crypto hedge funds claw their way toward reluctant acceptance within Big Tech, which is overwhelmingly liberal, at least until it comes to matters of labor and class.