Effective sympathy fueled SBF’s ‘ridiculous’ actions by FTX: Former Alameda engineer

Effective altruism was used to justify “increasingly dangerous and ludicrous” actions on crypto exchange FTX before it collapsed in November 2022, according to a former software engineer at Alameda Research.

Aditya Bharadwaj spoke to Cointelegraph a few days before FTX founder Sam “SBF” Bankman-Fried's Oct. 3 trial, explaining what it's like working under the former billionaire and how ideology played a role in the company's downfall.

Baradwaj argued that effective altruism—which encourages people to make as much money as possible and give later—deflected balance from rationality and drove many of the decision-making processes at the company into insanity.

“This ideology has been used to justify increasingly dangerous and ludicrous actions that should honestly have been viewed by a sane person.”

Baradwaj, who is widely seen throughout Silicon Valley tech circles and at quantitative finance firms in New York, says effective goodwill is an attractive and critical part of the cultural DNA at FTX and Alameda Research.

As an engineer at Alameda Research, I was robbed of my entire life savings by my former boss, Sam Bankman-Fried.

Now, after months of recovering from the insanity of the FTX failure, I'm ready to tell my story.

Let's start at the beginning:

(1/25) #SBF #FTX pic.twitter.com/x5wKvT0Dy2

— Aditya (@aditya_baradwaj) August 23, 2023

“All of us in the company had this vision: ‘I think it's good to be respected, and I think it's good to do things effectively.' So, you put these things together, and it's like, ‘Of course this thing is good.'

But the problem is when it comes to the ending, it justifies the thinking style, especially the ending you're talking about that is so weird and ridiculous that no sane person would make those decisions.

Under the guise of effective altruism, Bahnmann-Fried has donated millions of dollars to prevent future epidemics and cure malaria in developing countries. He was also one of the top supporters of the Democratic Party in the United States; But he later admitted to donating to Republicans as well.

As Big Short author Michael Lewis told 60 Minutes in a recent interview, one of the ideas being floated by Bankman Fried in the final days of FTX is paying Donald Trump $5 billion to prevent him from running for president in 2024 because the 31-year-old wants to “protect democracy.”

However, in Baradwaj's eyes, it was not an act of Bahnmann-Fried and altruistic philosophy; He seemed to basically believe what he was applauding.

As Baradwaj explains, despite the many accusations that Banman-Fried hides behind a fake, benevolent persona, he finds himself in the way he portrays himself in the media.

“He struck everyone as highly motivated, someone who believed in his mission and wanted to make it happen,” Baradwaj said.

“That trust has been grossly abused.”

Baradwaj said Banman-Fried's belief in his alleged ulterior motives may be why the former FTX founder has steadfastly maintained his innocence, despite mounting evidence to the contrary, saying he is “not guilty” of all charges against him.

RELATED: How Long Could Sam Bankman-Fried Go to Jail? Crypto lawyers weigh in.

“I'm sure there's all kinds of crazy, psychotic stuff going on in his head that's probably trying to deal with reality,” Baradwaj said. “Perhaps he truly believes that what he has done is good, or he may believe that he has done nothing wrong.

“The truth is important, and I hope the trial clears up a lot of questions about everything that went down.”

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