Information source: sequoiacap, slightly modified, author: ADAM FISHER

Every startup has a founding story. Apple was two hackers in a Los Altos garage. Google was two grad students in a Stanford dorm room. Alameda Research was a man trading cryptocurrencies in a Berkeley apartment. That man’s name was Sam Bankman-Fried, or SBF to his friends. Yet the trades he made — which eventually gave rise to crypto trading platform FTX — were far from the standard Silicon Valley startup story. In 2017, when he was just 25, SBF broke the so-called kimchi premium, an anomalous difference between the price of Bitcoin in much of Asia and the price in the rest of the world. It was a daring feat of arbitrage — SBF is the only trader known to have pulled it off in any meaningful way — that rocketed him to billionaire status and legend.

Among Wall Street’s financial elite, SBF’s bitcoin arbitrage trades are mentioned in the same tone as Paul Tudor Jones’s shorting of the entire U.S. economy in 1987, George Soros’s raid on the Bank of England in 1992, and John Paulson’s shorting of subprime mortgages in 2008. Profits from kimchi premium (and other similar trades) provided all the funds needed for SBF’s next move: the creation of cryptocurrency exchange FTX—a ​​company that may well end up creating the dominant all-in-one financial super app of the future. Nothing is a sure win in the cryptocurrency space, but FTX has the potential to join—or even surpass—the four largest U.S. banks (JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup), which would mean a valuation of $32 billion. SBF himself has amassed more wealth than anyone in a short period of time. The 2022 Forbes Billionaires List puts SBF’s net worth at $24 billion.

SBF learned to trade at Jane Street, an obscure high-frequency trading shop in New York’s financial district. The firm recruited from the brightest math and physics students at MIT. SBF, an MIT physics major, interned at Jane Street in the summer of 2013 and was one of the few interns invited back to work full-time. He was assigned to be a market maker for global ETF trading—a much harder job than simply making a market for a single stock, just as three-dimensional chess is much harder than regular chess.

Shortly before the Jane Street internship, SBF had a meeting with Will MacAskill, a young philosopher from Oxford who had just completed his Ph.D. Over lunch at Au Bon Pain, a restaurant outside Harvard Square, MacAskill expounded on the principles of effective altruism (EA). MacAskill argued that the principle meant that if one’s goal was to optimize one’s life in order to do good, one could usually do the most good by choosing to make as much money as possible—in order to give it all away. “You make money in order to give,” MacAskill said.

EA traces its origins to philosopher Peter Singer, who argued from a utilitarian perspective that the purpose of life is to maximize the happiness of others. Now in his 80s, Singer is quite possibly the most popular philosopher alive. In the 1970s, Singer almost single-handedly launched the animal rights movement, promoting veganism as an ethical solution to moral fears about meat-eating. Today, he is best known for his thought experiment with the drowning child. (What would you do if you were faced with a drowning child?) Singer states the obvious—and then universalizes its underlying principle: “Few people would stand by and watch a child drown; many would ignore the avoidable death of a child in Africa or India. The question is not what we usually do, but what we should do.” In short, Singer argues that the world’s wealthy have a moral obligation to do what they can to donate 10, 20, or even 50 percent of their income to improve the lives of the world’s poor.

MacAskill’s contribution was to marry Singer’s moral logic with the logic of finance and investment. MacAskill argued that people not only have an obligation to give away a large portion of their income, but also to do so as efficiently as possible. And, since every charity that claims to save lives has a budget, they can all be ranked on the basis of cost-effectiveness. So how much does it cost for a charity to save a life? The data showed that controlling the spread of malaria and worms had the greatest cost-effectiveness, saving one life for every $2,000 invested. Effective altruism prioritizes this low-hanging fruit—these are the drowning children we are morally obligated to save first.

▵ Will MacAskill

Despite its Oxford origins, EA gained much of its traction in the San Francisco Bay Area. Silicon Valley veterans like Dustin Moskovitz and Reid Hoffman, as well as tech gurus like Eric Drexler and Aubrey de Grey, publicly supported the idea.

SBF is from the San Francisco Bay Area, the eldest child of two Stanford law professors, Joe Bankman and Barbara Fried. His parents raised him and his siblings to be utilitarians—just as one might be raised to be a monist—and the dinner table was filled with discussions about the greatest good for the greatest number. One of SBF’s formative moments occurred at age 12, when he was weighing the pros and cons of the abortion debate. Rights-based theorists might argue that abortion is essentially child murder. The utilitarian argument compares the consequences of each. The consequences of losing the life of an actual child—a life in which parents and society have invested significant resources—are far more severe than the consequences of losing a potential life in the womb. Thus, to a utilitarian, abortion looks more like family planning than murder. SBF’s application of utilitarianism helped him resolve some of his tangled doubts about the ethics of abortion. It made him openly pro-choice—just like his friends, family, and peers. He saw the basic correctness of his philosophical beliefs.

A math ace, SBF breezed through Crystal Springs Uplands, an elite prep school in Hillsborough, California. Despite his academic excellence, he kept to himself, spending much of his free time playing computer games (StarCraft, League of Legends) and the card game Magic: The Gathering. But at MIT, he found his tribe, Epsilon Theta, a coed fraternity of super geeks who were also interested in magic and video games. Members enjoyed debates about math, physics, computer science, linguistics, philosophy, and logic at alcohol-free get-togethers.

It was his companion who introduced EA to SBF, and then to MacAskill, who was then virtually unknown. MacAskill was visiting MIT, looking for volunteers willing to join his "earn-to-give" program. Over a coffee table in Cambridge, Massachusetts, MacAskill pitched his idea: a strategic investment with returns measured in human lives. The opportunity was huge, MacAskill believed, because life was still ridiculously cheap in the developing world. Just do the math: At $2,000 per life, a million dollars could save 500 people, a billion could save 500,000, and so on. A trillion dollars could theoretically save 500 million people from tragic deaths.

MacAskill had found the best company. Not only had SBF grown up in the Bay Area and was a utilitarian, but he had already been inspired to take ethical actions by Peter Singer. During his freshman year, SBF had become a vegetarian and organized a campaign against factory farming. By his junior year, he was wondering what he should do with his life. MacAskill—Singer’s philosophical heir—had the answer: For him, the best way to maximize good in the world was to maximize his own wealth.

As MacAskill spoke, SBF listened and nodded. The logic of earn-to-give was impeccable. It was practical utilitarianism, SBF realized. SBF knew what he had to do, but simply said, "Yes. That makes sense." But between the bright yellow umbrellas and the crumb-strewn red brick floor, SBF's life goal was set: he was going to become very rich for charity. Everything else was just execution risk.

After determining the direction, MacAskill gave SBF one last piece of guidance, suggesting that SBF go to Jane Street for an internship that summer.

＊＊＊

In 2017, things were going well for SBF. He was doing great at Jane Street. His trades were so fluid that others would come to watch him work, just as people might watch an esports athlete stream on Twitch. He donated 50% of his earnings to charities he loved, with the largest donations going to the Center for Effective Altruism and 80,000 Hours. Both charities were dedicated to growing the “earn-to-give” philosophy into a movement. (Both had been founded by MacAskill a few years earlier.) He had a lot of good friends, most of whom were fellow EA guys and even some of whom were his colleagues. Jane Street was a great place to work, with an enviable corporate culture, plenty of benefits, and some of the most generous compensation in the industry. SBF had put himself on a path to becoming a very wealthy man. He had a great time at Jane Street and was content to stay there forever.

However, when SBF analyzed the bright future in front of him, he sensed that something was wrong. He realized that he was too safe. At Jane, SBF learned a trading principle. He learned "risk neutrality": Simply put, a trader choosing between $50 and a 50% chance of reaching $100 must be agnostic if they want to maximize the expected value of gains in their lifetime. Those who prefer a safe win are "risk averse", while those who would rather gamble are "risk lovers". But both risk lovers and risk averse people are losers. Because in the long run, they will lose to risk neutral people who accept both trades without prejudice.

Herein lies the problem, SBF realizes. The chances of him being fired from Jane Street are slim. Therefore, sticking with Jane is a risk-averse preference. To fully and rationally maximize income on behalf of the poor, he should apply his trading principles to all areas. He must find a risk-neutral career path—which effectively means he feels he needs to take more risk in an effort to become part of the global elite. To bring the greatest good to the world, SBF needs to find a path where he can throw his money around.

After this epiphany, SBF handed in his resignation. My friend and colleague Caroline Ellison, who was working on the Jane Street securities desk at the time, remembers the moment vividly. “It was quite unusual because he decided to resign not for anything in particular but simply because there were so many other options,” she said.

SBF outlines a list of possible options and provides some explanation for each:

• Journalism – low pay, but huge potential for impact.

• Run for office — or just be a consultant?

• Work in sports - EA needs people!

• Entrepreneurship – but what exactly?

• Wander around the San Francisco Bay Area for a month or so and see what happens.

“They were all so attractive, and I didn’t know which one would be the best choice,” he recalled. But he also knew that the only losing choice was to make no choice, so he closed his eyes and walked through Door Number Five.

That's when Caroline Ellison lost track of her friend.

＊＊＊

About six months after SBF dropped out, Jane Street sent Ellison to California for a recruiting trip, so she decided to visit her old friend. They were office mates, but they would occasionally socialize outside of work because they were both EA enthusiasts. Ellison wanted to catch up, but from the beginning, SBF was acting uncharacteristically, canceling several coffee dates. When the two finally met at Jumpin’ Java, SBF dodged even the most innocuous questions.

▵ Caroline Ellison

Ellison asked, "What have you been busy with over the past few months?"

SBF replied cryptically, "I can't tell you. It's a secret."

"Well, that's all right," Ellison said, sipping his tea.

An uncomfortable silence.

"Well, if you really want to know, I think I can tell you..." SBF said after a while.

"No. It's okay."

After an awkward pause, SBF broke the deadlock.

"Let me tell you," he said.

The story is pretty remarkable. After SBF left Jane Street, he moved back home to the Bay Area, and Will MacAskill offered him a job as the director of business development at the Center for Effective Altruism. He rented a modest apartment near CEA headquarters in Berkeley, and had a few weeks to explore before work began. It was his first vacation ever. In all his years at Jane, SBF had never taken any vacation.

It was his first time in the Bay Area as an adult, and he found his hometown unexpectedly exciting. All the new technology was here. All the startups were here. This was where much of the EA community gathered. SBF often hung out with his younger brother Gabe, who at the time lived in the EA commune near Stuart Street.

At the time, everyone in tech was talking about cryptocurrency. You couldn’t escape the discussion in the Bay Area. Earlier that year, a “hard fork” had roiled the crypto community, as what was then known as Bitcoin underwent mitosis, becoming Bitcoin Classic and Bitcoin Cash. Later that year, Bitcoin Classic looked set to break the $10,000 mark. Cryptocurrency was becoming a thing.

Out of curiosity, SBF began researching cryptocurrencies and almost immediately noticed something strange. Bitcoin was trading at a higher price in Japan and South Korea than in the United States. In theory, this shouldn't happen because it represents a risk-free profit opportunity. One could simply buy Bitcoin at a lower price, sell it at a higher price, and pocket the difference. Jane Street had built an empire by exploiting price differences of a few cents for high-frequency trading. And Bitcoin was trading at around $15,000 in South Korea: a 50% premium was unheard of.

SBF was skeptical of the numbers he saw on the screen. This couldn’t be real. But then he had a second thought: If it was real, then there was $5,000 sitting on the ground. Without wasting time, SBF decided to open some accounts on different exchanges to see if he could execute the trade. He couldn’t. But interestingly, it wasn’t because the arbitrage opportunity didn’t exist. It was a difficult trade to execute because there was so much red tape in the banking system and currency controls.

SBF spent another day dealing with red tape, completing a round-trip trade to Asia and pocketing a $20 profit. It was a proof of concept. SBF immediately put $50,000 of his own money into the system. The first order of business was to get the money into the system. This was operationally challenging. Not everyone can walk into a foreign bank and wire money abroad every day. But fortunately, SBF had a secret weapon: the EA community. There was a loose global network of like-minded people. Among them was a Japanese graduate student who, as a Japanese citizen, was able to open an account at a (unnamed, rural) Japanese bank that was willing to handle the trades SBF's newly formed Alameda Research wanted to make for a fee. The spread between Bitcoin in Japan and Bitcoin in the United States was "only" 10%, but Alameda found that it could make this trade every day. SBF's initial $50,000 was compounded at a 10% interest rate every day, and the next step was to increase the amount of capital. At the time, daily trading volume in cryptocurrencies was about $1 billion. Given that he wanted to get 5% of the profits, SBF began looking for a $50 million loan. He contacted the EA community again. Skype co-founder Jaan Tallinn provided a large portion of the initial $50 million.

▵ Nishad Singh

As the capital account swelled, money began to accumulate so quickly that SBF began hiring people to keep the money going. Cryptocurrency was so new that regulators in South Korea and elsewhere kept changing their minds about regulation—and then making those changes retroactive. It was a vortex of confusion. Into the vortex came Nishad Singh, a friend of SBF’s brother Gabe and a member of EA. Singer was a young man with glasses, a baby face and an earnest attitude. After a conversation with SBF, Singer decided to leave Facebook for a more meaningful job building FTX. Caroline Ellison also got involved, and a few weeks after SBF introduced her to the operation, she quit her job at Jane Street and moved to California. SBF’s first 15 hires, all from EA, crammed into a shabby 600-square-foot walk-up apartment and worked around the clock. There were standing desks in the kitchen, closets reserved for sleeping, and half-eaten takeout boxes piled throughout the space. It was a mess. But it was also a good old time. 50% of Alameda's profits are donated to charities approved by EA.

“This wouldn’t have been possible without EA,” Singer recalls. “All the employees, all the funding — everything is thanks to EA.”

＊＊＊

Bitcoin arbitrage didn’t—and couldn’t—last forever. The Japanese dwindled in their appetite for overpriced Bitcoin (or, more likely, another shadowy arbitrage outfit found its way into the trade and crashed it). Either way, the spread narrowed to near zero. But there were other trades to be made. Cryptocurrencies were new, and the tools traders needed to handle them were still being built, which meant there were market inefficiencies everywhere. And behind every market inefficiency was an arbitrage opportunity.

Alameda’s biggest headache wasn’t finding opportunities, but executing trades. At the time, when it came to crypto exchanges, the choice essentially came down to Coinbase or Binance. Coinbase emphasized being regulated by U.S. authorities, but as a result, it didn’t offer the options contracts and derivatives that professional traders needed to hedge their bets. Binance, on the other hand, offered the derivatives that SBF was familiar with while trading for Jane Street, but as a company it was constantly moving from country to country in an attempt to evade all jurisdictions. Neither exchange was particularly good for trading.

In mid-2019, SBF decided to double down again. He would bet Alameda’s millions of dollars in trading profits on a new venture: a trading exchange called FTX. It would combine Coinbase’s robust, regulation-loving approach with the derivatives offered by companies like Binance. He figured there was only a 20% chance of success, but in SBF’s mind, he needed extreme risk to maximize the expected value of his lifetime income so that his earn-to-give strategy could work. In his own judgment, it was absolutely possible that he would fail, but that didn’t matter.

The point is, when SBF multiplied the billions of dollars a successful crypto exchange could generate per year by his own assessed 20% chance of successfully building a crypto exchange, the number was still huge. That's expected value. If you live by the principles of trading assets, there is only one way to go: calculate the expected value and then aim for the largest one. In order to maximize your expected value, you must aim for it and then move forward blindly. It sounds crazy and maybe even selfish - but it's not. It's math. It follows the risk-neutral principle.

And so he moved his fledgling company to the crypto-friendly regulatory jurisdiction of Hong Kong, conveniently located next to what was then the world’s largest and most enthusiastic base of cryptocurrency users: China.

＊＊＊

As the COVID-19 pandemic hit, Michelle Bailhe, a young employee at Sequoia Capital, and Alfred Lin, a senior partner, began to take a closer look at the cryptocurrency space. Lin is an unsmiling workaholic who has little patience for the utopianism that fueled the first wave of crypto. Lin’s intellect was honed in graduate school at Stanford, where he studied statistics and options, swaps and derivatives. When he thought about cryptocurrency, the question he asked himself was: What’s good about it?

“Yes, cryptocurrencies can eventually replace money, and yes, it will eventually decentralize the web,” Lin said, waving his hand dismissively. “But all of that is not true today. So, what do people do now? They trade. If people trade, and people like to trade, what business model is going to make a lot of money? It’s going to be exchanges.”

Bailhe spent months immersed in the space, focusing on exchanges. She met with every founder and every firm that would hire her. She created a map of the entire market—at Sequoia, such a document is called a “Sequoia.”

“Of the exchanges we’ve seen and looked at, some had regulatory issues, some were already public,” Bailhe says. “And then there was Sam.” The exchange that SBF set out to build, FTX, was perfect. There was no concerted effort to circumvent the law, no Zuckerberg-style directive to break with the status quo. Yet FTX didn’t wait to get permission to innovate. The company based its headquarters overseas precisely because it was eager to build an advanced risk engine to support a variety of hedging strategies. SBF himself seemed born for the role of crypto exchange founder and CEO. Not only is he a top trader at a top firm — and therefore an ideal client — but his parents are both lawyers. “So he’s committed to taking every right step to get FTX to eventually be able to do everything they want to do legally in the United States,” Bailhe says. “Not by asking for forgiveness, but by asking for permission.”

The problem, in Bailhe’s mind, was that FTX didn’t seem to need any capital. She was right, but what she didn’t know was that SBF was already thinking about raising capital. Alameda had some unexpected losses due to something called counterparty risk. In theory, arbitrage is risk-free. But not when the shaky exchange you’re using to make your trades suddenly locks up and refuses to pay out your funds. Or worse, when two crypto exchanges can’t even agree on the form of a crypto transfer, the act of sending crypto from one exchange to another causes the tokens to disappear into the ether. Don’t even ask about futures contracts whose terms have been unilaterally changed in the agreement. Alameda hasn’t been immune to the exchange-level shenanigans that have given the entire crypto space a sordid reputation. But FTX has ambitions to change that. It was built to create exchanges that traders can rely on. SBF needs to get the word out. He wants FTX to be a respectable voice for crypto. That requires advertising, sponsorship deals, charities, and dedicated funds to pay for it all.

After all, FTX did need money. And it needed it from reliable sources so that it could continue to distinguish itself from those who came to the crypto space to defraud money. So in the summer of 2021, when FTX began raising its Series B round from a group of well-known Silicon Valley VCs, Bailhe and Lin pressed the "hold it" button. "The embarrassing thing is that we never tried to contact Sam because we thought he didn't need us," Bailhe admits. "I thought they were just making money and didn't need investors at all." After learning that this was not the case, they quickly contacted SBF and organized an emergency Zoom meeting between SBF and Sequoia Capital partners at 4:00 California time on a hot Friday afternoon in July. Bailhe was resolute, not hesitating to risk his reputation among the other partners: "I said, 'No, it's worth it. Cancel your afternoon.'"

The Zoom meeting went smoothly. SBF seemed relaxed as he answered questions, speaking in full paragraphs about extremely complex topics, as usual. Ramnik Arora, FTX’s head of product and another former Facebook engineer, remembers the meeting clearly: “We answered all these questions from Sequoia before we got close to the end. He was just awesome.”

Bailhe shared the same recollection: “We had a great meeting with Sam, but the last question I remember Alfred asked was, ‘Everything you’ve built is great, but what is your long-term vision for FTX?’”

That’s when SBF spoke to Sequoia about the so-called super app: “I want FTX to be a place where you can do anything with your money. You can buy Bitcoin. You can send money to your friends anywhere in the world in any currency. You can buy a banana. You can do anything with your money in FTX.”

Suddenly, the Zoom chat window on Sequoia's side lit up, and the partners were terrified.

One partner typed, “I love this founder.”

Another person typed: "I give it 10 points."

A third person exclaimed: "YES!!!"

What Sequoia is reflecting is the scale of SBF’s vision. This is not a story about how we use fintech, cryptocurrencies, or new banks in the future. This is a vision for the future of money itself — the total addressable market for everyone on the entire planet.

“I was sitting about 10 feet away from him, and I walked over and thought, this is awesome,” Arora recalled. “It turns out the guy had been playing League of Legends the entire meeting.”

The Series B round raised $1 billion. Soon after, the “meme round” began: 69 investors invested $420.69 million.

＊＊＊

SBF accepted the money and moved FTX’s headquarters from Hong Kong to Nassau shortly after. The coronavirus pandemic was raging, and Beijing’s zero-emission policy made it difficult for businesses in Hong Kong to survive. The Bahamas has more relaxed regulations on COVID-19 and is only a 20-minute flight away from Miami, where the cryptocurrency industry is beginning to gather around it.

In the spring of 2022, I flew to the company to see it for myself. Walking through the terminal in Nassau, I happened to see a copy of The New York Times. The headline on the front page said it all: “$300 billion evaporates in days as cryptocurrencies collapse.”

Here’s a look at what’s happening in the cryptocurrency market. The price of Bitcoin plummeted to its lowest level in 2020. A so-called “stablecoin” lost its peg and became worthless overnight. Shares of FTX’s public counterpart, Coinbase, plunged. The market was in chaos.

Next to The New York Times was a copy of the Nassau Guardian that read “Hurricane Alert as Omicron Sets Record Surge.” This should be an interesting week, I thought to myself.

***

The following Monday, I braved New Providence's floodwaters to the FTX base camp, a parking lot the size of a Walmart. FTX's operations are housed in five 2,000-square-foot pavilions with stucco walls and steel roofs: identical structures that look like mushrooms that popped up in the parking lot after a rain.

The headquarters building features a reception desk in a microscopic lobby. The door is unlocked. There is no receptionist. I peek around the corner and enter the FTX command center, which has 29 desks in a room that can accommodate no more than eight people. Each desk is connected to two or three other desks. There are no aisles. To move through the room, you have to walk (and sometimes crawl over) a sea of ​​office chairs. In place of cubicle walls, each desk has two, four, or even six widescreen monitor walls. These screens emerge from aluminum columns like palm leaves, in random directions: up, down, sideways. Some screens are mounted so high that they seem to be hanging from the ceiling. It's a jungle-like office environment, and the strangest thing is that no one seems to be home.

Then I hear a rustling sound. A Northern California twang comes from the far corner of the room: "Yup...Yup...Yup... (chuckles), oh, exactly."

It was SBF himself, working either early or late, as the case may be. I recognized the man because next to his desk was a giant blue velvet bean bag chair, which SBF famously used as a place to nap when he didn't leave the office during his weeks-long work binges.

He was on a Zoom call. And, from what I heard, he was chatting with someone about buying a stake in a competitor: "How much do we have? How much can we buy? How much are we legally allowed to buy?"

It sounded like an important strategic conversation, and SBF's questions were delivered with an overclocked phrasing (something I recognize after listening to too many podcasts at 2x speed). In the middle of it, however, he came around his LCD and silently greeted me with a big smile and an outstretched right hand, while making a wavy tip gesture with his left hand that meant "please go sit over there." He wouldn't have done this if it weren't for efficiency.

Over the next hour or so, people trickled in, filling the room. They were all friendly but focused. They seemed used to having a stranger in their midst. Then I got word that FTX was having an all-hands meeting, and I was invited. To my surprise, the meeting was being held over Zoom—even though half the assembled audience was within ten feet of SBF. At the designated time, everyone turned on their screens and adjusted their cameras. SBF appeared in the corner of the Zoom grid, talking about the situation at hand.

All in all, much of the crypto world was panic selling, trying to get ahead of the market, covering margin, or just plain fear. Since FTX is a mainstream exchange (the fifth largest exchange in the crypto space), this volume hit was a big hit. There is really no good way to simulate such an event, but the FTX trading platform held up under this pressure. Therefore, SBF's first priority was to congratulate the development team for building a strong system: "Overall, I think the platform handled this crash relatively well, which is good. Thank you everyone".

There were some modest smiles in the Zoom windows, including from Singh, FTX’s director of engineering. He knew firsthand from his trading days at Alameda how frustrating a shaky exchange could be. “As usual, we have some changes to make, but nothing really big,” SBF said. “The next step is a round of belt-tightening. Money is going to be tighter for everyone in our industry and other industries in general, and this is not targeted at any particular group. So if you’re looking at expenses of, say, over $100 million, we should be having a discussion about that. That’s our takeaway.” He then ended his portion of the speech. But he added, “Oh, by the way! Everyone try to finish in ten seconds!”

And just like that, the rest of the staff began speaking. In fact, different FTX executives took over the presenter’s mic to update the company on what was going on in ten seconds or less.

• FTX Stock Market Now Open in Private Beta

• A separate FTX fan club has emerged: FTT DAO

• Time-weighted average price function is under testing

• Sponsorship deals for the Met Gala and amfAR Gala have been successful so far

• NBA Eastern Conference Finals kicks off tonight at FTX Arena: Miami Heat vs. Boston Celtics

The last item was the only one that elicited any sort of comment from SBF, who shouted, "Go Heat!".

All staff adjourned. Total meeting time – 10 minutes!

I remarked to the person sitting next to me that this was pretty quick for the whole crew. She said "This was actually an unusually long meeting. Usually it's 5 minutes".

***

I spent a full week at FTX HQ (a reporter sat at a desk ten feet away from SBF). I interviewed people, took notes, hung out, and soaked up the atmosphere. I expected chaos after a market crash, but the atmosphere was almost relaxed, except for the fact that SBF was always working. He was working when people arrived. He was working when people left. Because SBF wore headphones, he was plugged into his computer all day long as he would have one Zoom meeting after another. The only time I saw him unplugged was when he collapsed into the super-large bean bag chair next to his desk and took a nap.

▵SBF taking a break at NASSAU

At first glance, the scene is typical of a startup: the kitchen is stocked with snacks and soda; breakfast, lunch, and dinner are provided free of charge; the company bathroom is stocked with everything you need to live in the office: Q-tissue, disposable razors... In keeping with the fashion aesthetic of senior management, the company's dress code is marketing-promotional-practical-merger: gift bag T-shirts with the FTX logo, nylon sports shorts, white cotton sports socks.

But, over time, the differences began to stand out. FTX is no ordinary startup. Most striking is the average age of its employees. Among senior management, SBF himself just turned 30; Singh is 28; and Arora, the elder statesman of the group, is 35. The company is also deeply international. You hear the rapid cadence of Mandarin as often as English, but even this universal language has a variety of flavors: from a Bahamian whisper to an ESL rant.

I often walk out of the pressure cooker environment of FTX headquarters and into the "frying pan" of the company parking lot (under the Bahamian sun). There I run into a group of FTX employees. They are also taking a walk. By and large, the people I meet are happy at work. There are a few who are unhappy because they are overworked. To a person, they are always polite and helpful. FTX has a remarkable corporate culture, and like the fashion choices on display, it comes from the top. There is a no-nonsense spirit here, an open attitude that makes for interesting conversation.

Can Sun, FTX’s in-house counsel, told me that his main job is to underwrite the many deals SBF brokers through Handshake. Ninety-nine times out of a hundred, Sun said, the terms are in the other party’s favor. This is another company policy that emerges from a rigorous logical argument. In an iterated prisoner’s dilemma, the best first move is always to cooperate. And if the opponent is flawed, it’s better to screw me over now than later.

A woman who helps with marketing for FTX (she declined to give her name) told me about a crypto event in the Bahamas last month. Tony Blair and Bill Clinton showed up, as did Michael Lewis, Katy Perry, and Orlando Bloom. Her job is to try to broaden the brand’s appeal. “When I first joined, we had endorsement deals with Tom Brady, Steph Curry, Major League Baseball, and it was like a fraternity,” she said. “That’s why we signed Naomi Osaka.”

Adam Jin, who oversees strategic investments at FTX, told me about one of his favorite Web3 projects, a health app called STEPN that has its own cryptocurrency wallet. “Once you download the app, you can go to the marketplace and buy shoes,” Jin said. He showed me his shoes (virtual sneakers on the STEPN app). Jin must have sensed my confusion because he continued, “You can use the app without shoes, but with shoes, you’re entitled to earn tokens by walking around.”

One example of the hottest new trend in crypto is STEPN: play-to-earn games. With STEPN, you have to make an upfront investment. Jin’s virtual shoes cost him $800 (though he paid in Sol, the cryptocurrency associated with the Solana network). But Jin can earn a return on his shoe investment by walking. STEPN pays him in cryptocurrency for every kilometer he walks in the shoes. The exact ROI depends on the ever-fluctuating exchange rate between Sol and STEPN’s in-game currency, as well as the cost of maintaining the shoes. (I was surprised to find that the virtual shoes do wear out and have to be replaced.) But according to Jin, the point of focusing on what it takes to win the game is lost. “It’s changed my lifestyle,” he says, noting that he’s lost all the weight since he started using the app. “I walked five kilometers yesterday on my lunch break, just running around and being healthy.”

I kind of get it. STEPN adds motivation, in the form of money, to the usual host of reasons people have for getting healthy. And, for some, that’s the motivation they need to get out and start exercising. Is this a super app for crypto? I was skeptical until a few days later, when the truth finally dawned on me. And it wasn’t just because of Jin. Many (maybe most) of the FTX employees I met around the parking lot weren’t simply taking a break and stretching their legs. They were earning crypto through the STEPN app.

At first, I thought only finance people working in crypto would be motivated by this convoluted carrot. But as soon as I realized everyone but me was wearing invisible sneakers, FOMO hit me. I found myself (a non-finance type) being drawn to the interesting math of gaming to make money.

During one of Jin’s five-kilometer lunchtime walks, I stopped him and said, “Adam, since the STEPN app uses the GPS on your phone to track your movements, can’t I just give my phone to someone else and have them do the walk for me?”

Jin caught my thought and said as he walked away, “Of course! You can pay someone $20 to hold your phone for you. Then you get paid for their action. I now realize that this is what FTX is doing.”

I said, “That might be a good idea.”

Jin smiled and said, "This will also make me healthier."

***

I clocked in at 9 and left at 5 at FTX headquarters, and it was like this most days, until one day I was invited to live in what amounted to an FTX dorm. Many employees receive corporate housing subsidies in a nearby development called Albany. The centerpiece of the development is a yacht basin and marina surrounded by a half-dozen residential towers. The area is so new that several of the towers are still under construction. FTX owns a series of multi-bedroom apartments in these towers and rents them out to employees as temporary residences. The whole setup has a preppy feel. In fact, Albany could be mistaken for an institution of higher learning. Behind the gatehouse is everything you could ask for on a campus: restaurants, cafes, a health club, golf and tennis facilities, and, of course, classrooms.

What a campus! Albany is one of the most breathtakingly gorgeous places I’ve ever set foot in. The marinas are filled with superyachts, megayachts, and even a shiny superyacht or two. The apartment buildings that overlook the yachts below are, if that’s possible, more immaculate than the boats. As befits “serious architecture,” the buildings aren’t numbered but named: Squire, Tetris, Cube, Honeycomb, Lantern, Charles, Gemini, Orchid. Each was designed by a famous architect: Manhattan’s Morris Ajmi, a noted postmodernist, did two. The community positions itself as a second home for affluent young people, in other words, pro athletes and pop stars. Cardi B has a spot here, as does Stephen Curry. Justin Timberlake and Tiger Woods are nominally the property’s developers. So perhaps it’s no surprise that Albany’s amenities include a top-notch sports training facility (with the Bahamas’ only cryotherapy chamber), as well as a state-of-the-art recording studio.

I stayed a few nights in the Tetris Apartments, owned by FTX. Each of the four bedrooms has an ensuite bathroom, its own climate control system, and a solid-panel door with its own lock and key—features that make each bedroom feel like a small hotel room. The common areas are fronted by a 26-foot-tall glass wall that slides open to reveal a dramatic balcony with a sunken infinity pool. The kitchen is also separate and well-stocked (although from the looks of it, no one has cooked in it.)

As I fried myself an egg (I chose an egg of indeterminate length) my thoughts kept drifting until they lingered in the shadow of The Great Gatsby. Written a century ago, this incomparable American novel seems particularly relevant now. The Roaring Twenties are back, of course. I’ll be damned if Albany isn’t West Egg. But is crypto the new jazz? And if it is, does that make SBF the new Gatsby? Both were young; both were self-made; both were equally wealthy in inflation-adjusted dollars; and both were extremely secretive men. On the other hand, the differences between Gatsby and SBF are huge. Literary scholars still debate what motivated Fitzgerald’s most memorable character, but one thing is certain: altruism, valid or not, was not a factor. So while SBF may be Gatsby in some important ways, he is not Gatsby. Still, I wondered if there was a deeper resonance. I’m an arty young man myself, and as I ate my solo meal, I found the novel’s closing few sentences creeping into my consciousness.

Gatsby believed in the green light, in the bright future that faded before us year after year. We didn't see it then, but it didn't matter, tomorrow we would run faster and stretch our arms farther. . . . On a fine morning --

So we move on, sailing against the current, constantly being carried back into the past.

***

The next day, I finally got the chance to interview Sam Bankman-Fried. We met in a small conference room. I had a microphone and an MP3 recorder ready. SBF came in with his laptop, and before he even sat down, he turned it on and started playing his new favorite computer game, Storybook Brawl. It was an obscure game, an “autobattler”: an emerging genre that combines elements of trading card games (like Magic: The Gathering) with chess-like action and strategy. The game had been published only a few years earlier by an equally obscure, low-budget “indie” company called Good Luck Games.

Although we were face to face, SBF made absolutely no eye contact, not even a glance. His eyes were fixed on the screen. His fingers were tapping on the keyboard, sometimes frantically, sometimes barely. His right knee was shaking at a rate of 100 times per minute: a nervous tic, the aftereffect of playing with some gadgets. The interview began.

My opening line was a big joke. I asked, "Am I talking to the world's first trillionaire?"

While this is indeed a silly question, it is not as silly as it sounds. According to Forbes estimates, SBF has a higher net worth than the vast majority (80%) of the world’s billionaires, and yet, he is just getting started. FTX is a company in its infancy.

I first tried the trillionaire question on Michelle Bailhe, a partner at Sequoia who, along with Lin, knows SBF and his company best. She hesitated for a moment as she calculated, and then said, “That’s an interesting question. I think he does have a chance.”

SBF had no such hesitation. But he did quickly dismiss the idea, lip-syncing himself to question his own ability to make such a career, before actually answering.

“Maybe let’s back up a little bit,” he said, before launching into an explanation of his own personal utility curve. “That is, if you plotted dollars donated on the X axis, and Y was how much good I did in the world, what does that curve look like? It’s definitely not linear — it does have a tail, but I think it drops off very slowly.”

His point seems to be that somewhere along the line, the returns on philanthropy become diminishing. There’s a point where even effective altruism stops working. “But I think that even at a trillion, there’s still a very large marginal utility for dollars donated.”

This interview has turned into my own personal economics seminar, with SBF as my mentor. He is as good as anyone in the world today at explaining the principles of macroeconomics, a fact I know because I later watched the best work on the same subject on YouTube. However, SBF was playing round after round of Storybook Brawl while he was teaching me macroeconomics.

Still, I got my answer. And it turns out that I had aimed too low. One trillion is not enough to solve the world's problems, so SBF wasn't going to stop at just one trillion. It was an answer that led to the next question, and SBF, ever willing to help, had anticipated that question. "So, is five trillion all you have to help the world?"

SBF is now interviewing himself. He's slowed down his game, and I assume it's because of the cognitive load of doing three things at once. He's asking good questions (my job); he's formulating answers (his job); and he's playing Storybook Brawl (no one's job). But then I hear the tapping of his fingers start to speed up, and I realize he's not slowing down under the load at all. In fact, quite the opposite: this guy is the equivalent of a gank in Storybook Brawl's brawl!

And with that, he answered his own question. “Well, at this scale, I think the answer is probably yes. Because if you had spending at the scale of the U.S. government, it would probably have too weird and distorting an effect on things.”

Now that we’ve explored the far end of the SBF utility curve, the seminar turns to a discussion of discount rates. “We all make up the world’s decay rate, but we’re working with, say, 5% per year as a floor constraint,” he says. “And compared to the effective rate that I’m working with, which you can think of as the rate at which we can turn more capital into more capital, it’s more like 20% per year. And that’s probably going to be true for a while, so it makes sense for me to keep working.”

He still didn’t look at me; his real attention was on the screen. He was playing a video game. But, to be fair, maybe “playing” is the wrong word here. Maybe he was playtesting: looking for ways to incorporate crypto into his favorite game, because I didn’t know it at the time, but as we spoke, Good Luck, the indie gaming company behind Storybook Brawl, was being absorbed into the FTX empire, the latest in a string of acquisitions.

He continued: "But that doesn't mean we can't give during this time as well. We are starting to expand that."

This strikes me as typical SBF understatement. The size of his donations, even now, before he really starts divesting, is enormous. Alameda Research, the company that created FTX's profits, still exists, and its purpose seems to be to generate profits, $100 million per year today, but potentially $1 billion, which can be stuffed into the brand new FTX Foundation. Likewise, even now, 1% of FTX's net fees go to the foundation, and FTX processes nearly $5 billion worth of trades every day. The foundation, in turn, donates to a diverse range of charities recognized by EA.

As you might expect after reading this, there's a reason to pony up some cash now rather than doubling down in the expectation of giving away more later, and that reason rests on math. Simply put, in SBF's view, some aspects of the world are decaying at a rate of 20% per year, so spending money now will make the world a better place more effectively than spending money later. "I think there are a few things that are pretty pressing," SBF says. "There's a long list of key considerations, all of which are important, and you can't screw up any one of them or you'll miss out on much of the total value you could potentially get."

To be clear, SBF is not talking about maximizing the total value of FTX, he is talking about maximizing the total value of the universe. And his units are not dollars. His units are utilitarian units, in a kind of GDP of the universe. He is maximizing utility, units of happiness. Not just for every soul alive, but for every soul (human and animal) that will live in the future. Maximizing total happiness in the future is the ultimate goal of SBF. FTX is just a means to that end.

But back to the critical point (of things you can’t screw up). SBF made his list:

• “When we build super-powerful AI, that’s likely going to be a point where everything we do is going to matter a lot.”

• “We should start thinking about how to prepare for the next pandemic before it arrives, because at some point, it’s going to come.”

• "I think we're probably at a turning point in American politics right now. What we do in the next, say, two to 10 years is very important. Right?"

And SBF has literally put his money where his mouth is. SBF has personally backed a range of so-called AI-adjusted nonprofits and public benefit corporations, including Anthropic and Conjecture. He’s also the big money behind a new nonprofit, Pandemic Preparedness, which, not coincidentally, is run by his brother, Gabe. SBF is the second-largest donor to Biden’s campaign to defeat Trump, behind only Mike Bloomberg.

Since SBF did the hard work of the interview, I was free to think, and finally, within my allotted hour, I asked what was probably the first non-stupid question of the entire interview.

I concluded, “So, you are young, energetic, and you peaked at exactly the time when you thought the world was at the peak of crisis.” SBF nodded in agreement, “Does this strike you as just a lucky coincidence, or does it strike you as perhaps a sign that your thinking is flawed and that you have a savior complex?”

He thought for a moment and said, "That's an interesting question."

I doubled down: “Do you really happen to be living in the most important existential moment in the future history of your race?”

SBF retorted: “This is certainly not the foresight of one person, and this kind of foresight is not innate.”

"Prescience" is a term of art. There's more math to explain (in this case, like Bayes' theorem), but for your benefit, dear reader, I'm going to skip it.

SBF goes on to say, “But if you want to get really tit-for-tat, there are some anthropological considerations, which might not be as crazy as it sounds”. With the mention of “anthropology” we have reached escape velocity in our conversation and entered the “nosebleed zone” of modern metaphysics. Once again, I will spare the reader the trouble. Suffice it to say that while SBF was willing to consider the idea that he might be delusional, as a thought experiment, he ultimately rejected it.

game over.

***

After my interview with SBF, I was sold. I was talking to a future trillionaire. Whatever magic he had on the partners at Sequoia (who were hooked on him after one Zoom), it worked on me, too. For me, it was just a gut feeling. I’ve been talking to founders and doing deep dives on technology companies for decades. It’s been my entire professional life as a writer. Because of that experience, there must be a pattern-matching algorithm running in my subconscious. I don’t know how I know it, I just know it. SBF is a winner.

But that wasn’t even the main thing. I also felt something else: something in my heart, not just my gut. As I sat ten feet away from him for the better part of a week, studying him in the grind of a startup and chatting with him between bean bag naps, I couldn’t shake the feeling that this guy was actually as selfless as he claimed to be.

So I find myself believing that if SBF can keep his head above water in the coming years, he will triumph big time, and just as Alameda was a stepping stone to FTX, FTX will be a stepping stone to super apps. Banking will be disrupted and transformed by cryptocurrencies, just as media was transformed and disrupted by the web. This sort of thing has to happen eventually, because the current system, with its layers of intermediaries, is outdated and prone to collapse (the 2008 global financial crisis was just the latest in a long line of failures), because banks don’t actually know what’s on their balance sheets. Cryptocurrency is money that can audit itself, requiring no accountants or bookkeepers, so, in theory, a financial system with blockchain built in could cut out most of the financial middlemen, to the benefit of everyone. This is, of course, the pitch for every crypto company. FTX’s competitive advantage? Ethical behavior! SBF is a Peter Singer-inspired utilitarian in a sea of ​​Robert Nozick-inspired libertarians. He’s a moral maximalist in an industry where the vast majority of people are moral minimalists. I’m a Nozickian myself, but I know who I’d rather give my money to. SBF! I’m for it with both hands. If he ends up saving the world as my banker, even better.

As FTX’s success seemed inevitable, I became interested in SBF the person. He was unlike any other billionaire I’d met, and I’d hung out with quite a few. It was like Spock’s brain had been transplanted into Fozzie Bear’s body. He was both: instantly likable (with the harmlessness, kindness, and openness of a Muppet) and so abstract that he seemed more like a super-advanced AI than a flesh-and-blood person. I wanted to know what made SBF so unusual, so, as we packed up our things in the conference room (I rolled up the long cord leading to my lapel mic, he folded up his laptop), I decided to ask him directly about his apparent eccentricities.

I observed: “So, you’re clearly what they call ‘neurodiverse’, but you’re not on the spectrum or Asperger’s”.

He agreed: "No."

"So, where does your diagnosis come from, doctor?"

"Definitely some attention deficit disorder. I get easily distracted if something isn't engaging enough. So, I find myself doing things to occupy myself."

That makes sense, but not entirely, so I followed up with another question.

“I grew up a little like you.” (SBF and I both went to high school in the competitive Silicon Valley, albeit decades apart.) While there were a lot of rich dudes in high school, there were also a lot of very smart kids. However, there was never anyone like this. There was no such thing as ADHD. But now it’s everywhere. What do you think is the cause?

“Part of it may be that social media has retrained our brains to think and act,” he said. “But I think it’s healthy to have a certain level of boredom with things that are stupid or unproductive or not very useful. And, along with this move toward lower attention spans, people are becoming more productive. That’s important and good.”

I nodded. In the case of FTX, this was certainly true, and I thought back to that ten-minute all-hands meeting.

Sensing an opportunity to connect, I added my own perspective by saying, “I don’t follow social media, not because I have any moral reason against it, but because for me, reading books is the highest bandwidth way I know of to get quality information into my brain, and I crave that stimulation. I’m addicted to reading, which explains why I eventually became a writer.”

SBF said, "Oh, really? I will never read a book."

I don’t know what to say. I’ve read about a book a week my entire adult life and have written three books myself.

SBF explained: “I’m very skeptical of books. I don’t want to say that any book isn’t worth reading, but I actually do believe something quite like this. I think if you write a book, you’ve screwed up, and it should have been a six-paragraph blog post.”

So: books are for losers.

Does he really believe that? Do I? Is the price of SBF's genius to be bored with literature, literary nonfiction?

Whatever the case may be, I found myself feeling sorry for the man. And it occurred to me that my reaction was exactly the kind of beta that might be expected in the brave new world that cryptocurrency is creating.

So I thought again. What did he think I was thinking, I wondered? Wouldn’t a person with any intelligence realize that dismissing books (all books) as essentially worthless might irritate a writer? Was he kidding me? Was this funny? Was this humor?

I was happy with my meta-analysis until I realized that one can always improve their strategic play in this game. It's like poker. Level one is just thinking about how to strengthen your own hand. Level two is thinking about what your opponent's hand is. Level three is thinking about what your opponent thinks you have. And so on. And, since SBF is obviously a genius, I should simply assume that SBF will always play at the N+1 level compared to me. This makes my analysis of the intentions behind SBF's "books are for losers" idea spiral to infinity and crash like a computer program stuck in a loop.

That evening I took some time to sit on a beautiful Bahamian beach, watching the sunset and interrogating my own confused thoughts and feelings. The answers came to me like the final reel of an 80s apocalyptic comedy that went so bad.

Greetings Professor Falken

Hello

A strange game.

The only way to win is not to play.

***

At the end of a long week, I noticed a party going on in Building 30, which is located on the edge of the FTX corporate compound. I was curious because even though Building 30 was set up as a lounge with couches, a large table, and board games, I had never seen anyone actually relaxing in it. I decided to check it out.

A cocktail party was in full swing, with a dozen or so people I didn’t recognize standing around. It turned out to be a gathering of the local EA community, who had been drawn to Nassau in hopes that the FTX Foundation would fund their various altruistic ideas. The purpose of the party was to provide a friendly forum for the EAs who actually run the nonprofit EA Alliance to meet the FTX EAs who would fund them, and vice versa. Ironically, while FTX hosted the weekly meetup, providing the venue and drinks, few actual FTX employees showed up and participated. Presumably, they were working too hard.

Maybe it was the beer, but everyone I met was smart, engaging, and interesting. I ended up talking mostly to Josh Morrison and Kat Woods, two of the doyens of the EA movement. Morrison is a serial nonprofit founder. Woods has a similar background, but now runs a meta-charity that incubates other charities. They tagged along as they tried to explain what drives their movement and what drives them to it.

“Imagine if nerds invented a religion (jab at my question) where people could argue about it all day long,” Woods said.

Morrison retorted: "It's ... an ideology". (The debate has begun.)

Woods graciously disagrees: “EA isn’t an ideology, it’s a question of: How do I do the most good? The cool thing about EA, compared to other career fields, is that you can keep changing your perspective—and still be part of the movement.”

I can't help but interrupt. I understand the religion part. Morrison and Woods are nothing if not missionaries. But why nerds?

Woods provided an answer to my question. (She said, “EA attracts people who really care, but who are also very smart. If you’re altruistic but not very smart, you’ll get bounced. If you’re smart but not very altruistic, you’ll get nerd-sniped!”

Nerds being sniped? This is a new question for me. I'm very interested.

“You can snipe a nerd by putting an interesting puzzle in front of them, and they’ll say, ‘I love this,’ because EA not only has the most interesting puzzle in the world, it’s also the most rewarding,” Woods said.

I learned that “nerd sniping” is the practice of engaging brainpower by posing problems as puzzles.

“It’s about the way FTX does the foundation, and it helps focus on what really interests me,” Morrison said. “The foundation wants a lot of money to try a lot of things quickly. How do you do that effectively? It’s a rhetorical question, the move of a prep debate champion who went to some finishing school in Cambridge, which is exactly my case. Part of the answer is to give money to people in the EA community.”

Woods continued: "I'm just following up on what Morrison was saying. Because EA is different from other communities. They like the moral thing, that's a fact. And we're like, what's the moral, what's the truth."

These are big questions, and I'll leave them to SBF and company to answer, they're too big for me. I resisted the temptation to get nerdy. Besides, I have a different set of questions.

Who is SBF and what is he made of?

These were the things that brought me to the Bahamas. Meeting him in person only deepened the mystery.

What made him so different from everyone else I had met?

***

There is no doubt that SBF was nerdy-sniped in his youth at MIT. In fact, just before he was nerdy-sniped, SBF had a personal blog in which he wrote about his search for the meaning of life. In the blog, he repeatedly proclaimed his allegiance to utilitarianism, carefully outlining his reasoning before concluding, "So I am a complete utilitarian." Later writings refined this statement, making it clear that he was a utilitarian in the purest sense of the word Benthamite, and could not save himself from the influence of the Benthamite path. From that point on, his every action was a principled consideration of the implications of this philosophy. Even now, even when directly challenged, SBF insists that he had no restrictions in following the implications of the philosophy to its logical end. "If I did that, I would want to take a long look at myself."

So when MacAskill sat down with SBF in Harvard Square the following summer and carefully explained, as only an Oxford-educated philosopher could, that the practice of effective altruism boiled down to “applied utilitarianism,” he was on to something. He had found his path. He would become a maximizing engine. As he wrote on his blog: “If you’ve decided that some of your time or money could be better spent on others rather than on yourself, then why not spend some more? Why not all of it?”

Indeed, why not all of them? SBF was under my microscope for a full week. There was never a moment when he wasn’t actively participating in some important meeting (with key employees, regulators, business partners, mentors) to outline the future of FTX. I watched SBF’s own parents line up to wait for his time, only to give up because the wait was too long.

In devoting every waking moment of his life to his work, SBF did not feel that he was doing anything unusual. He was doing what he thought every righteous person should do (if they had a broad heart and a clear mind). He was trying to maximize the amount of good in the world. Yet the same could be said of Woods and Morrison, and indeed of all the EAs I met in the Bahamas. Like SBF, they had all fallen in love with the idea of ​​saving the world in an efficient and rational way, but they were clearly having fun while doing it. As one of them said to me, "I came for the cause, I stay for the people". SBF, on the other hand, seemed qualitatively different: he seemed utterly driven, as if he were being whipped.

It’s hard to see SBF in a clear light. The brilliance of the self-made billionaire is blinding. His intellect is awe-inspiring. But once I chopped away the piles of money and the extra IQ points, I discovered something unexpected: poverty. In spending everything he had on others, SBF seemed to spend nothing on pursuing his own happiness.

It wasn’t just that great books weren’t worth seeing. Great movies weren’t worth seeing either. Citizen Kane, he asserted, was “a hollow movie not worth seeing.” Food got the same treatment. SBF preferred fake burgers and vegetarian fries. As for fine dining, he never saw the point: “I really don’t think eating is that memorable.” He wasn’t happy with his performance (his influence) either. He didn’t own a suit until he had to buy one to testify before Congress. He drove a Corolla. He publicly vowed not to own a yacht. As for more carnal pleasures (SBF supposedly had a private life), he was so private that not even his own parents knew who he was dating or if he was dating. It was a mystery.

SBF's rejection of joy is so profound that it makes me wonder if the absence of joy is the key to understanding him, as opposed to his philosophy. Is he so wrapped up in his own head that he can't feel joy? Is SBF effectively held hostage by his own frontal cortex, stuck in a kind of Stockholm syndrome in his head? Or is he simply somewhere on the sharp end of the normal human distribution of joy capacity? Is that what makes SBF feel so different, so alien?

I don't know. But I did ask the people closest to him.

Ramnik Arora is SBF’s closest No. 2: they have worked side by side for years. One day at lunch I asked Arora candidly, “Do you think it’s possible that SBF is incapable of experiencing joy?”

Arora put down his fork and thought for a moment. "That's a fair question," he said. He turned around and said after a long pause, "He had a lot of fun playing games." He thought about the stud tennis tournament the company had hosted a few weeks ago. How did he do? I wondered. "SBF came in second, and he hated that," Arora said.

Joe Bankman is a well-known tax attorney who is also a psychologist and therapist. He is also SBF's father, and he and his son are very close. I asked him about SBF's ability to experience joy.

Bankman rejected my theory, but not completely. “So, SBF doesn’t take pleasure in the same way that some other people do,” Bankman admitted. “But I think SBF gets a lot of pleasure from a lot of things, it’s just that they’re all work-related.” I countered: Satisfaction doesn’t count. By “pleasure,” I meant something more primal and hard: physical desire. Bankman said: He wasn’t always a vegetarian; for example, he loved a good steak as a child.

Arguably, the person who knew SBF best was George Lerner, a therapist at FTX. Lerner’s psychiatric services were available to everyone at the company, and he had more than one number on speed dial. Lerner struck me as an excellent therapist, the kind I’d want in a therapist, so I asked him about SBF’s seeming rejection of worldly pleasures.

“It’s interesting because I’ve spoken to SBF about this particular topic at length,” Lerner said.

He continued: "It's not some morbid thing, for some weird reason (which I don't understand either) they want to help. We're talking about EA in general, but also SBF in particular, they want to make a difference, they want to do it with their life. He's definitely not EA. But that still doesn't explain why, or if that somehow undermines the drive for joy."

SBF was a mystery even to his own therapists.

***

It’s my last night in the Bahamas, and I’m spending it in the Tetris condo, relaxing by the pool (at the edge of the terrace) on the dock far below. The sun is starting to set: a fiery ingot, swallowed by the surging lip of the world. As the sun sets, my eyes are drawn to the tower closest to the water. The Orchid is Albany’s flagship building, its south end cutting into the sandy waterfront like the prow of a ship cutting through a wine-colored sea. The wraparound veranda offers views of the harbor and the ocean. It’s a six-story cake, and the entire building is wrapped in aluminum latticework, a sheath of laser-cut silk threads that is a historic facade but a modern one. Architect Morris Adjmi cited his upbringing in New Orleans, as well as sculptors like Rachel Whiteread and Do Ho Suh, for inspiration. The overall effect is spectacular: a modern interpretation of the creole style.

The penthouse atop Orchid (Apartment Five) is probably the most expensive apartment in the entire Bahamas, and it’s home to SBF. He lives there with nine roommates*: fellow travelers in EA Sports. It’s a dorm situation, but, to paraphrase Scott Fitzgerald, billionaire dorms are different than the dorms you and I are familiar with. Apartment Five is a luxurious place, covering 11,500 square feet, with six bedrooms and spectacular views from every window. Two elevators serve the apartment, with direct access to the space. Each bedroom has an ensuite bathroom and leads directly to the balcony. Common areas include the lobby, media room, dining room, and party room at the top of the building. Curved glass walls slide open to open the entire space to the outside world.

After the sun dipped below the horizon, Apartment 5 lit up. Dramatic washes of lighting bathed the balcony in blues and purples. The wraparound porch became a rainbow, a beacon. A party was underway, and the entire penthouse was ablaze.

I imagined the scene. Board games. Laughter. A close-knit group. Just SBF, his family (his mother, father, and brother were all in town), and close friends. A small team dedicated to fixing the world: through the magic of quantitative reasoning and the overwhelming force of goodwill. All of them united by this mission.

It's weird: roommates, dorm life at 30 (an age where many people have married, bought houses, and had kids). But I also think I've gotten into SBF's head enough to understand it. I, like Fitzgerald, do think that very wealthy people are different. Because they have more money, yes. But also because they tend to have fewer friends, but keep up with Hemingway. It's not worth feeling sorry for the plight of the oligarch class, but there are downsides to being billionaires. Reciprocity becomes difficult between the post-economic man and the mere civilian. What can you give to someone who has everything and asks for nothing in return? What do you expect to get?

But within the inner circle of Apartment Five—a community of family and friends united by an almost Pythagorean philosophy of rules—there are no units of account. Love is currency. Love is infinite. And infinity is a problem.

I leave it to SBF to unpack the math. He explains: "As soon as you say, what are the odds of having infinite happiness? What if infinite utility is a possibility? Now, all of a sudden, we're comparing infinite hierarchies. The linear hierarchy is broken."

But infinity is also the solution, because it provides a shield against the tight logic of utilitarianism. When one of the clauses is infinite, there is no way to do expected value calculations. The incalculability of love in Apartment 5 makes it a refuge from the whip that drives him. SBF can escape, if only for one night. He can swap the bean bag for a real bed and sleep blissfully in the king-size, super-luxurious bed.

Before my mind wandered off, I took one last look at Orchid's Apartment 5. A figure appeared, standing on the deck rail, looking at the silver stars in the mild Bahamian night. He stretched his arms out toward the dark water in a curious way, and although I was far away from him, I could swear he was trembling.

Yet, I was reminded of the novel again. In Fitzgerald’s day, there was a real person, John Pierpont Morgan, who guided the country as it transitioned from a horse-powered agricultural economy to an industrial economy run on rails in the 19th to the 20th century. Who will do the same for us in this new century?

Awakening from my reverie, I looked back at Orchid one last time. The figure I had seen was gone, and I was alone again in the unpeaceful darkness.

*SBF later moved out and currently has no roommate.