The disgrace and fall of cryptocurrency giant Sam Bankman-Fried was astounding, especially considering that not too long ago the 30-year-old multi-millionaire graced the cover Forbes and was celebrated as a symbol of progressive market values. Bankman-Fried, or SBF as he is commonly known, founded the infamous FTX cryptocurrency exchange, valued at $32 billion, in January, which filed for Chapter 11 bankruptcy last week. Reportedly, Bankman-Fried is now in the red investigation by the U.S. Department of Justice and the Securities and Exchange Commission for alleged fraud and g*mbling with investor cash.
Ever since the SBF turmoil was publicized, headlines abounded comparing the FTX scandal to the infamous Bernie Madoff Ponzi scheme. But the SBF scam was different in an important way: Bankman-Fried’s public image in the media as a genius and philanthropist was reinforced and legitimized by his proximity to the powerful Democratic elite, to whom he had donated millions of dollars. Bankman-Fried was one of the Democrats largest donors, second only to George Soros.
The SBF deception was driven by pseudo-philosophy calls “effective altruism” of which he was the popular face. The idea is for the “innovators” to generate as much money and influence as possible in order to do as much “good” as possible.
The d*mise of the SBF shows how hollow that idea was, fueling his own narcissism more than anything else. Effective altruism turned out to be nothing more than the new face of neoliberalism: the fantasy that individualist capitalist accumulation can be hidden behind a facade of moral leadership and called saving the world.
But it goes further. Altruism, cultural sensitivities, and the need to project a progressive aura 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 appeals and corporate ESG ratings that act as ways for businesses to advertise their ” social responsibility” among investors.
And here comes the danger. Because it is not only hypocritical to behave as if capitalist accumulation is altruism. It’s also a great way for people like Bankman-Field to avoid being investigated for what turns out to be a Ponzi scheme.
It is no coincidence that our infernal cultural landscape, which grants favors in exchange for moral standing and patronage, has unleashed the insidious ambitions of opportunistic figures such as the SBF or Elizabeth Holmes, another Silicon Valley darling revealed as a fraud.
Who can forget the infamous scandal surrounding Holmes and her now-defunct tech company Theranos, a venture that promised blood testing technology that would revolutionize healthcare infrastructure but failed to produce it. President Joe Biden visited Theranos headquarters in 2015 while he was vice president and called Holmes “inspirational.” Holmes was enthusiastically embraced by the Obama administration as a shining example of their goals for US healthcare and Biden he told Holmes in a 2015 meeting that he and then-President Barack Obama “share your vision for a preventive-focused healthcare paradigm.”
Holmes and Bankman-Fried were able to sell the illusion of altruism to the virtue-hungry liberal elite, using the same logic with which the elite constantly fights against its political rivals. From incessant rhetoric about “threats to democracy,” “spreading misinformation,” “election deniers,” and “white supremacist terror*sts,” the liberal establishment sends the same message as Holmes and the SBF: supporting me makes you look like a good person. In doing so, they are producing the same undeserved approval that Holmes and Bankman-Fried used to allegedly extort the investment and credibility of their founding milieu.
The ability of Sam Bankman-Fried and the liberal elite to define themselves as dazzling influencers and moral leaders employs the same brutal logic behind why corporations have ostensibly embraced the revival and its socially, financially and politically lucrative dogma: everything we do is justified because we are good people and contribute to the good of all.
In a way, both the Holmes and Bankman-Fried FTX scandals represent the liberal establishment trying its own medicine. Celebrities, media conglomerates, and political entities who backed these tech wolves in sheep’s clothing to gain allegiance to the progressive hype have now been exposed for their lack of diligence and moral authority.
But there is a more important lesson here: moral hubris often obscures not only selfish capitalist accumulation but also fraud.
Angie Speaks is the co-host of the Low Society podcast.
The views expressed in this article are those of the author.
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