Five years ago, Sam Bankman-Fried was working for a charitable organisation that functioned on the principle of ‘effective altruism,’ a philosophy which advocates using evidence and reason to figure out how to do maximum good for people and taking action on that basis. It was then that he observed a pricing anomaly in Bitcoin and decided to tread on the path of cryptocurrencies, make millions and give it away to the needy.
Now, Bankman-Fried, Founder of cryptocurrency exchange FTX, is one of the richest people in the world. According to the Bloomberg Billionaires Index, the 30-year-old is worth over $20 billion, following the latest round of investments by venture capitalists in FTX and its US arm at a combined $40 billion valuation.
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Yet, in his heart, the core philosophy is the same as five years ago. He plans to keep around 1 percent of his earnings or, at minimum, $100,000 a year to lead a comfortable life and give the rest away, Bloomberg reported.
Treading the path
It was Will MacAskill, a 25-year-old doctoral student at Oxford, who first proposed the idea of ‘earning to give’ to Bankman-Fried. Although many believe MacAskill’s ideas are controversial, they appealed to Bankman-Fried.
After graduation, Bankman-Fried got a job at trading firm Jane Street Group in New York and worked as a trader. Every year, he would donate half of his six-figure salary to effective-altruism-approved charities and animal welfare groups. However, it wasn’t enough for him. It was at this time that he noticed the anomaly in cryptocurrency that led to the making of FTX.
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Last year, Bankman-Fried is said to have donated $50 million, including for pandemic relief in India and anti-global-warming initiatives. This year, the target is to go up to $1 billion.
Capitalist monk
Despite being a billionaire, Bankman-Fried lives a life like a sort of a capitalist monk to whom even sleep seems like an unnecessary luxury, his friends said.
“Every minute you spend sleeping is costing you X thousand dollars, and that directly means you can save this many less lives," Bankman-Fried’s colleague and childhood friend Matt Nass told Bloomberg.
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Most weekdays, he sleeps on the beanbag in his office. The young billionaire drives a Toyota Corolla and doesn’t see much value in buying things.
“You pretty quickly run out of really effective ways to make yourself happier by spending money," Bloomberg quoted Bankman-Fried as saying.
Talk with Katy Perry
His commitments have evolved in the last five years. Bankman-Fried now watches the Super Bowl from box seats in front of NBA star and FTX endorser Steph Curry. He lunches with basketball legend Shaquille O’Neal and parties with the top-notch in the entertainment and business world.
At one such dinner hosted by singer Sia Furler at a Beverly Hills mansion, Bankman-Fried chatted about crypto with pop star Katy Perry. Impressed by his talk, Perry announced on Instagram the next day: “I’m quitting music and becoming an intern for @ftx_official ok.”
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Getting where he wants to
So far, Bankman-Fried has donated less to charity than he has splurged on publicity. He has spent millions on the naming rights for stadiums and about $30 million to make a Super Bowl ad with comedian Larry David who plays a crypto sceptic. However, even though he is risking whatever he has made in crypto, he’s investing to maximise the amount of good he does, the report said.
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