Effective altruism, an ethical philosophy that encourages people to make as much money as possible to give it away later for charitable purposes, played a role in the decision-making processes at crypto exchange FTX, leading to what some described as “increasingly risky and ridiculous” actions. Aditya Baradwaj, a former software engineer at Alameda Research, which was closely tied to FTX, shared his perspective on how this ideology influenced the company’s culture and actions prior to its collapse in November 2022.
According to Baradwaj, the culture at FTX and Alameda Research embraced effective altruism, with many employees sharing the belief that making money was a means to an altruistic end. This ideology, he argued, sometimes pushed decision-making processes to extreme levels that may not have been rational.
One example mentioned was FTX founder Sam Bankman-Fried’s donation of millions of dollars to prevent future pandemics and fight malaria in developing countries, aligning with the principles of effective altruism. Bankman-Fried was also known for his political donations, which included support for both Democratic and Republican candidates.
Effective Altruism’s Role in Shaping FTX’s Culture and Risky Decisions
Despite allegations that Bankman-Fried’s altruistic persona was fabricated, Baradwaj stated that in person, Bankman-Fried came across as genuine in his beliefs and motivations. This sincerity could be why Bankman-Fried has maintained his innocence, despite facing legal charges and mounting evidence to the contrary.
Overall, this perspective sheds light on the intersection of ethical philosophies and business decisions in the crypto industry, where ideals like effective altruism can have a significant impact on corporate culture and behavior.