In-depth look at SBF: a legendary trader worth tens of billions and an extreme altruist


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Sam Bankman-Fried’s rapid accumulation of wealth stems from his long-held utilitarianism.

Original Title: “A Deep Insight into the Heart of SBF, an Ultimate Altruist
Original author: Benjamin Wallace
Translation: Odaily Planet Daily Azuma

In January 2018, at only 25 years old, Sam Bankman-Fried (SBF), who had just left Wall Street, discovered an incredible arbitrage opportunity when trading cryptocurrencies-due to the enthusiasm of local investors, the Japanese market Bitcoin price has a 10% premium compared to the United States.

At that time, others in the crypto market were being distracted by another even more amazing thing-Bitcoin on the Korean market had a 30% price difference (the so-called “Kimchi Premium”) than the US, but South Korea restricted The sexual monetary policy makes it difficult for the Korean won to be converted into US dollars. SBF himself had thought about taking advantage of this opportunity in the past. He even once calculated whether it was feasible to build a plane and fill it with people and fly to Seoul to buy Bitcoin directly.

After discovering opportunities in the Japanese market, SBF decided to take action. Large-scale arbitrage execution is quite complicated. SBF and his friends founded a trading company called Alameda Research in Berkeley, California. They set up a series of intermediaries, including some small banks in rural areas of Japan, and used a month-long Regional premium arbitrage can generate up to 25 million U.S. dollars per day.

In describing that period, SBF said: “You can count, this is the craziest deal I have ever seen.”

A few days ago, I (the original author Benjamin Wallace) and SBF had a chat with SBF through FaceTime. It was 10pm Hong Kong time. You can see the night of the whole city through the windows of SBF’s high-rise office, where he is managing a wing. Feng’s crypto empire.

Alameda Research has a daily trading volume of more than 2 billion U.S. dollars, ranking tenth on the BitMEX trading account profit ranking. Now SBF will spend most of his time on his second business, FTX, a derivatives trading platform with high transaction volume and low fees. Galaxy Digital founder Mike Novogratz called it “the most innovative Exchange”.

SBF’s gaze has been floating off the screen, and there will be a constant crackling sound from time to time at the end of the video. At first I thought he was replying to emails, until he took out a FTX one-year anniversary coin that he had been spinning, and A deck of cards that he has been shuffling.

He said to me: “I have obsessive-compulsive disorder.”

SBF is wearing a gray hoodie and his hair is not as thick as in the photo. He shares an apartment with other roommates. Last fall, he donated a large sum of money to the Biden campaign team, which puzzled many observers in American politics. According to SBF’s own estimates, his net asset value is approximately US$10 billion.

The rapid accumulation of SBF wealth stems from its long-held utilitarian worldview. His father was a professor of law with a great public interest spirit at Stanford University. SBF was long recognized by Benthamites (Benthamite, a doctrine of European utilitarianism in the 18th and 19th centuries, and the most widely spread doctrine). ) Attracted by the ideal of providing the greatest happiness to the most people.

When thinking of factory farming, SBF practiced this concept for the first time in his life and became a vegetarian. He said: “A chicken is tortured for six to eight weeks, just because people spend half an hour to eat it. It makes no sense.”

Later, SBF stumbled upon the Effective Altruism movement (effective altruism), and also encountered a branch organization that pursues the creed of Earning to Give (earning to give). The creed promotes the pursuit of lucrative careers so that more money can be used for donations.

To this end, after SBF graduated from the Massachusetts Institute of Technology (MIT), he became a securities analyst at Jane Street Capital, which allowed him to donate to organizations dedicated to addressing animal welfare and potential threats to artificial intelligence.

In the end, the banker SBF resigned. After working for a period of time for a British charity called Centre for Effective Altruism (literally translated as “Centre for Effective Altruism”), he became a full-time cryptocurrency investor. At the time, cryptocurrency was an unavoidable topic on Wall Street. It was an immature and inefficient industry. One year after Alameda Research launched its Japanese trading business, SBF found another huge opportunity and believed that it would bring some discipline to this chaotic market. So at the end of 2018, SBF moved to Hong Kong and founded FTX.

Prior to that, the SBF had very limited political participation. In 2012, he wrote some blogs about his ideas about the value of swing state votes inspired by Nate Silver (a statistician who has successfully predicted election results twice); in 2016 , SBF spent a day canvassing votes in Pennsylvania. When going to the homes of registered Democrats, SBF expected to see people’s gratitude, but the result was the opposite.

“The eyes of these people would say, Fxxk you,” SBF recalled: “Those who can talk about everything basically said, “I hate these two candidates. I hate you for forcing me to make this choice. I hate you.” Forcing me to say these things, I want my privacy back. I don’t want me to live in a swing state.”

In 2020, SBF can do much more than just visits. After performing more mathematical calculations, the SBF once again quantified the value of the swing state ballot and evaluated the most effective way to make an impact. SBF found Future Forward USA, a super political action committee associated with Facebook co-founder Dustin Moskovitz. SBF donated more than US$5 million to Biden and the groups that support him, which helped Biden launch a 9-figure, 11-hour TV advertising campaign at the last minute.

This funding put SBF in second place on the list of CEOs supporting Biden, as calculated by the Wall Street Journal. SBF said that it was not so much for a specific reason as the “overall stability and decision-making process” of the Biden team convinced him.

Being one of the largest donors did not bring any special benefits to SBF. Because of this funding, SBF participated in a unique Zoom online event. In this event, 20 people who did not know each other listened to the speech together and tried awkwardly to ask questions. SBF has never spoken to Biden. He said, “I think it will be very cool. I have a lot to say, there are many things I can nag with him, but I’m sure he doesn’t care at all.”

On election night, when more than $100 million in bets were placed on the election results through the FTX prediction market, the SBF was as nervous as most Biden voters. That night, the SBF believed that Trump had a 30% chance of winning. After Dade County in Miami turned to Trump unexpectedly, he “reasonably” believed that the probability of both sides winning was 50-50, but “perceptually” 99% confident that Trump will win. SBF himself also bet on FTX and made a “not small” profit.

SBF does not think that he will become a frequent visitor to political donations. It is entirely possible that he will not donate to any politicians in 2024. SBF stated: “If someone is competing with his twin brothers (in this case, it means two rational centrist campaigns), no matter what, hope the best brother can win. Of course, this (donation or not) will be very big The degree depends on the details.”

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