Effective Altruist Tortured by Excess at FTX

Sam Bankman-Fried trial reveals more EA delusions

As I wrote about recently, the trial of crypto’s golden boy, Sam Bankman-Fried, presents a unique opportunity to shine a light on effective altruism (EA), the cult-like philosophy with deep ties to the vegan and “alternative protein” sectors.

Many adherents to EA believe in making as much money as possible, with the goal of donating much of one’s earnings to worthy causes. Not on the EA to-do list is excessive and frivolous spending.

On Monday, Nishad Singh, a member of Bankman-Fried’s inner circle, testified that he was “embarrassed and ashamed” at the excessive spending at FTX, apparently because of his own adherence to effective altruism.

According to this Reuters account, Singh was shocked to learn of a $13 billion shortfall and he “confronted Bankman-Fried in an hourlong conversation on the balcony of the $35 million Bahamas penthouse they shared.”

Wait, what? A $35 million penthouse doesn’t sound very EA either.

This article in Fortune covering the same testimony has the apt headline: Sam Bankman-Fried pushed for $30 million Bahamas penthouse despite concern from FTX colleagues it would be ‘ostentatious’.

Ya think?

It seems that Singh tried to share his concerns with his boss (and long time friend). Here is how Molly White, who is closely covering the trial, describes it:

Singh, like Bankman-Fried and many others at FTX and Alameda Research, was an adherent to the effective altruism philosophy, but sometimes butted heads with Bankman-Fried over actions he didn’t feel were aligned with effective altruist goals. He frequently complained to Bankman-Fried about what he perceived as excessive spending, testifying that he “felt kind of embarrassed and ashamed of how — how much it all reeked of excess and flashiness. It didn’t align with what I thought we were building a company for.“

And then came the gaslighting:

At one point, Bankman-Fried humiliated Singh by accusing him in front of others of “sowing seeds of doubt in the company decisions”, saying that people like Singh were “the real insidious problem here.”

Singh was (and probably still is) going through “moral injury”, which occurs when the people and institutions you believed in betray you by behaving immorally. You can be either a witness, perpetrator, or someone who fails to stop the wrongdoing to experience moral injury. It seems Singh was all three. (He has pled guilty to several crimes and agreed to cooperate with prosecutors.)

Effective altruism at FTX created an incubator of gaslighting and moral injury.