Ethereum Co-Founder Vitalik Buterin Weighs in on Sam Bankman-Fried’s FTX ‘Fraud’

As a co-founder of Ethereum, Vitalik Buterin is one of the most prominent voices in crypto. He took to Twitter early Tuesday morning to urge his audience not to write off everything FTX’s departing CEO Sam Bankman-Fried did as a part of “the fraud.”

“Automatically downgrading every single thing SBF believed in is an error,” Buterin said. “It's important to actually think and figure out which things contributed to the fraud and which things didn't.”

Buterin has publicly criticized Bankman-Fried since FTX’s bank run, plummeting token price, and subsequent bankruptcy filings sent shockwaves across the crypto industry. Five U.S. government agencies are investigating FTX and Bankman-Fried for alleged fraud, including the Securities and Exchange Commission, the Department of Justice, and the Commodity Futures Trading Commission.

At a conference in Argentina last week, Buterin likened Bankman-Fried to “a 1930s dictator” because of the cult of personality surrounding Bankman’s persona. 

Harsh words aside, Buterin wants the public to think critically when evaluating Bankman-Fried’s life choices. SBF’s practices and beliefs, from veganism to playing video games, are not all worthy of scorn.

From $26 Billion to Nothing: The Rise and Fall of SBF and FTX

Amid FTX’s collapse this week, founder and CEO Sam Bankman-Fried (SBF) has rapidly transformed from a crypto industry icon and so-called “savior” into an ignominious figure, responsible for potentially billions of dollars’ worth of customer losses. And he’s apparently lost his whole fortune in the process, as well. Bloomberg’s Billionaires Index reports that Bankman-Fried’s assets dropped in value from $16 billion at the start of the week to effectively nothing now, following news of FTX’s bankr...

But what about “effective altruism,” the philosophical concept Bankman-Fried and his lackeys at Alameda Research touted, which revolves around improving the lives of others using evidence-based reasoning? 

Ava Labs CEO Emin Gün Sirer believes that gig is up.

“Vitalik, if you're trying to save the Effective Altruism brand, it's dead,” Gün Sirer said. “It contributed to the fraud by providing cover (linear utility) for unchecked greed. SBF, and his shallow philosophy, isn't a hill worth fighting for.”

The co-founder of DeFi firm Gnosis shared a similar view.

“I think it is worth talking about the danger of using EA as a justification strategy,” Martin Köppelmann said of effective altruism. “You can abuse EA ideas to justify every shitty behaviour that earns you money as you can claim it is all for a greater good.”

To Köppelmann, Buterin offered a simple response.

“Oh I agree, that is one of the things that contributed to what happened,” he replied.

Notably, one of Bankman-Fried’s largest effective altruism proponents was Oxford philosopher Will MacAskill, who worked as an advisor at FTX’s now-defunct Future Fund. MacAskill has since published a lengthy statement addressing the issue and his ties to Bankman-Fried.

“If that goodwill laundered fraud, I am ashamed,” MacAskill said. “I know that others from inside and outside of the community have worried about the misuse of EA ideas in ways that could cause harm. I used to think these worries, though worth taking seriously, seemed speculative and unlikely. I was probably wrong.”