Samuel Bankman-Fried, also going by the initials SBF is an American entrepreneur and investor. Right now, he’s known for being part of one of the largest crypto frauds. At one point, Bankman-Fried was 41st on the list of the richest Americans. That didn’t last long, as he was soon accused of being involved in the biggest financial frauds in the history of the United States.
Sam Bankman-Fried is the founder of the second largest crypto exchange in the world – FTX.com. Crypto enthusiasts saw him as a crypto-genius who would take this web 3.0 industry to the next level. Instead, he abused their trust and embezzled their money.
He has been charged with wire fraud, security fraud, commodity fraud and money laundering. He is accused of defrauding lenders, investors and consumers out of $8 billion. The Bankman-Fried trial is happening as we speak. At first, he was released on bail, but the judge reversed this decision a few days ago and SBF is back in jail. The 250 million dollars bail was withdrawn the moment the 31-year-old was accused of trying to influence witnesses. Instead of his parents’ home in Palo Alto, California, he will await trial in prison.
According to Judge Lewis Kaplan, the moment Bankman-Fried shared snippets of his private communication with the New York Times, that was seen as an attempt to indirectly influence the witness. His girlfriend Carolina Ellison is a former director of Alameda Research and one of the prosecutor’s witnesses.
The trial against Bankman-Fried will begin on October 2.
SBF wanted to buy an island-state
One of the most interesting news that revealed the documents filed in court is that Samuel Bankman-Fried had a plan to buy the island-state in the Pacific Ocean named Nauru. The plan was for the island to be a refuge for members of the movement he believed in, the so-called “Effective Altruism” and be used in the event of a global disaster where more than 50% of the global population would die out.
A bit of geography – NauruNauru or the Republic of Nauru is an island-state in Micronesia. The country is part of Oceania, its neighbors are Banaba of Kiribati, Tuvalu, Solomon Islands, Papua New Guinea, the Federated States of Micronesia and the Marshall Islands. The official languages are Nauran and English.
The capital of Nauru is Yaren, the largest city on the island is Denigomodu.
The entire country covers an area of 21 km2 and according to the last census of 2011, there are 10,834 inhabitants.
Documents filed with the court revealed his plans as part of an email to all FTX Foundation employees who share the same belief as Bankman-Fried and his brother Gabriel.
The island was supposed to be a refuge for Bankman-Fried and his like-minded members of the Effective Altruism movement in the event of an apocalypse.
The ultimate strategy, according to the memo, was “to purchase the sovereign nation of Nauru in order to construct a ‘bunker / shelter’ that would be used for some event where 50%-99.99% of people die [to] ensure that most EAs (effective altruists) survive.” The memo also mentioned to plans to develop “sensible regulation around human genetic enhancement, and build a lab there,” noting that perhaps “there are other things it’s useful to do with a sovereign country, too.”
Nauru is, or at least was, a rich deposit of phosphate minerals. Ore could be found on the surface allowing for surface mining. This has negatively impacted the environment on Nauru, and since the 1990s, the ore has been depleted, and it is financially unviable to mine it. The state had prepared a fund for the days when the mineral reserves will be exhausted. Unfortunately, the money quickly ran out, so in order to secure finances, Nauru became a haven for tax evasion and a center for money laundering. In 1998, 70 billion dollars were transferred from Russia to banks in Nauru. Until 2002, money laundering was not an offense on the island. The same year, the United States placed Nauru on its money laundering list, which led to the closure of the National Bank of Nauru in 2006.
Ironically, money laundering is common to the island and to Bankman-Fried. In the list of charges against him, there are as many as 13 charges related to money laundering.
Ironically, money laundering is common to the island and to Bankman-Fried. In the list of charges against him there are as many as 13 charges related to money laundering.
It is speculated that after the purchase of the island, SBF’s plan could have been to return the island to its glory days and make it a tax haven again. So far there is no confirmation about this.
What is Effective Altruism?
Effective Altruism is a philosophical movement that advocates using evidence and reason to discover the best way to help others. The movement began in the 2000s, and the term Effective Altruism began to be used 11 years later. SBF is a vocal supporter of this movement.
The movement follows the following principles:
- Evidence-based decision-making.
- Impartiality – the interests of all people should be considered equally, regardless of their nationality, race, gender or any other factor.
- Maximizing impact – supporters should strive to maximize the impact of their actions.
Some of the activities undertaken are: donating to efficient charitable organizations; work in sectors where the most progress can be made; spreading EA ideas.