The disgrace and downfall of cryptocurrency giant Sam Bankman-Fried has been astonishing to watch, especially considering that not too long ago, the 30-year-old multimillionaire graced the cover of the Forbes and was celebrated as a symbol of progressive market values. Bankman-Fried, or SBF as he is commonly known, founded the now infamous cryptocurrency exchange FTX, valued at $32 billion in January, which filed for Chapter 11 bankruptcy last week. Bankman-Fried is now reportedly under investigation by the U.S. Justice Department and the Securities and Exchange Commission for alleged fraud and for gambling with investors’ cash.
Since SBF’s turmoil was publicized, headlines have abounded comparing the FTX scandal to Bernie Madoff’s infamous Ponzi scheme. But SBF’s scam was different in an important way: Bankman-Fried’s public image in the media as a genius and philanthropist was bolstered and given credibility by his proximity to the powerful Democratic elite, to whom he donated millions and millions of dollars. Bankman-Fried was one of the Democrats‘ biggest donors, second only to George Soros.
SBF’s scam was powered by a pseudo-philosophy called “effective altruism” of which he was the popular face. The idea is for “innovators” to generate as much money and influence as possible to do the maximum possible “good.”
SBF’s downfall reveals just how hollow that idea really was, more an engine for his own narcissism than anything else. Effective altruism turned out to be nothing more than the new face of neoliberalism: the fantasy that you can hide individualist capitalist accumulation behind the facade of moral leadership and call it saving the world.
But it goes further than that. Altruism, cultural sensitivity and the need to project a progressive air in the media can make or break the reputation of a politician, celebrity or corporation these days, especially in the newly emerging landscape of social media cancellations and corporate ESG ratings that act as ways for businesses to advertise their “social responsibility” to investors.
And that’s where the danger comes in. Because it’s not just hypocritical to act like capitalist accumulation is altruism. It’s also a great way for people like Bankman-Field to avoid being investigated for what turn out to be Ponzi schemes.
It’s no accident that our hellish cultural landscape that grants favors in return for moral posturing and patronage has unleashed the insidious ambitions of opportunistic figures like SBF, or Elizabeth Holmes, another Silicon Valley darling revealed as a fraudster.
Who can forget the infamous scandal surrounding Holmes and her defunct medical technology company Theranos, an endeavor that promised blood testing technology that would revolutionize health care infrastructure but failed to produce the technology. President Joe Biden famously visited the Theranos headquarters in 2015 while he was Vice President and called Holmes “inspiring.” Holmes was enthusiastically embraced by the Obama administration as a shining example of their goals for American health care, and Biden told Holmes at their 2015 meeting that he and then-President Barack Obama “share your vision of a health care paradigm focused on prevention.”
Holmes and Bankman-Fried were able to sell an illusion of altruism to a hungry-for-virtue liberal elite with the same logic that elite constantly weaponizes against its political rivals. From the constant rhetoric about “threats to democracy” and “disinformation spreaders” and “election deniers” and “white supremacist terrorists,” the liberal establishment sends the same message as Holmes and SBF: Supporting me makes you look like a good person. In so doing, they manufacture the same undeserved consent that Holmes and Bankman-Fried used to allegedly swindle investment and credibility from their establishment milieu.
The ability of Sam Bankman-Fried and the liberal elite to style themselves as dazzling influencers and moral leaders employs the same brutal logic behind why corporations have seemingly embraced wokeness and its socially, financially and politically lucrative dogma: Anything we do is justified because we are the good guys and contribute to the good of all.
In a way, both the Holmes and Bankman-Fried FTX scandals represent the liberal establishment getting a taste of its own medicine. The celebrities, media conglomerates and political entities who endorsed these tech wolves in sheep clothing for the benefit of being attached to progressive hype have now been exposed for their lack of diligence and moral authority.
But there’s a larger lesson here, too: Moral preening often obscures not just self-interested capitalist accumulation but fraud.
Angie Speaks is the cohost of the Low Society Podcast.
The views expressed in this article are the writer’s own.