The philosophy of effective altruism makes the case that one way that idealistic young people with fancy degrees could improve the world is not by working at nonprofits, but by earning as much money as possible through finance, and then donating it all to vetted causes. But while effective altruism centered on giving money away, it seemed like all that FTX did in the Bahamas was spend.
In 2021, 25-year-old financial analyst Christine Chew flew to the Bahamas to join the staff of the cryptocurrency exchange FTX. Christine believed that crypto could financially empower people who didn’t have access to banks in countries like Turkey or Argentina. She also was a believer in effective altruism, which sought to devise a rigorous system for how people could do the most good for the world. Sam Bankman-Fried, the founder of FTX, had quickly become one of effective altruism’s most famous and wealthy boosters—and Christine wanted to help him fulfill his vision.
“Everything I saw about Sam was that he was doing good for the public,” Christine says.
When Christine arrived, the company put her up at the SLS Baha Mar, a four-star hotel. A few months later she moved into a massive $6.75 million apartment in the Albany, a resort complex in one of the ritziest areas of the Bahamas. The billionaires’ playground included an 18-hole golf course designed by former World No. 1 golfer Ernie Els, a mega-yacht marina, and exclusive restaurants closed to the public. A full-size replica of the Wall Street charging-bull statue sat on the marina, near a Rolex store.
Christine’s new apartment was ostensibly owned by FTX executive Ryan Salame but was more so just another property in the company’s sprawling real estate empire. While many FTX employees were hardworking introverts who relaxed over board games, Ryan often hosted parties for employees in his apartment, filled with food and booze and revelry. FTX paid to keep restaurants open around the clock, hire DJs for parties, and allow employees to expense cars—including BMWs—to chauffeur them around the island. “It definitely felt a little bit crazy and extravagant. It feels like no one is keeping track of how much we were actually spending—the food, the cars, the benefits,” says an FTX staffer.
FTX staffers who didn’t live in the Bahamas could fly in and stay at luxury hotels in the Baha Mar, with all expenses paid. Executives flew the company’s private jet on trips abroad. FTX chartered planes to fly Amazon packages from the mainland to employees in the Bahamas. At the Paris Blockchain Week Summit in April 2022, FTX threw a party across from the Eiffel Tower and rented a boat down the Seine, and employees stayed at luxury hotels.
While Christine’s new lifestyle didn’t exactly fit into effective altruism principles, she was able to rationalize the expenses in comparison to FTX’s seemingly ceaseless success. “The lavishness was justified in the assumption that we are making tons of money—and we’re probably spending 0.1% of what the company makes in a day,” Christine told herself.
Christine’s apartment was stunning. But it was nothing compared to the crown jewel of FTX’s new Bahamian real estate empire: a $30 million, 11,050-square-foot penthouse in the Albany’s seaside Orchid residence. The sixth-floor residence consisted of five bedrooms and included a private elevator, a spa, a pool, a grand piano, and Italian marble floors. A private balcony looked out onto the gleaming blue-green ocean below.
The penthouse, of course, belonged to Sam Bankman-Fried. For all his talk of living modestly and giving money away, he had chosen a palace that would have befitted the bootleggers and kingpins who had come before him. Initially, Sam’s friends had blanched at the prospect of spending so much money on housing. Engineer Nishad Singh thought the penthouse was “super ostentatious” and wanted them to find a cheaper place. But Sam told him that he would pay $100 million for the drama of the house hunting to be done, so Nishad stopped arguing and agreed to move in with him.
Five couples (or ex-couples) lived in the Albany, among them some of FTX’s top executives. After the FTX crash, many outside voyeurs of the scandal came to believe that its residents were polyamorous, and all dated each other openly. This belief stemmed from a widespread misinterpretation from an online article—which stated that its residents were in relationships—and the unearthing of the blog posts of Caroline Ellison—Sam’s ex and the co-CEO of his trading firm Alameda—from two years earlier, in which she had written about her previous forays into polyamory.
“I’ve come to decide the only acceptable style of poly is best characterized as something like ‘imperial Chinese harem,’” she wrote. “None of this non-hierarchical bullshit; everyone should have a ranking of their partners, people should know where they fall on the ranking, and there should be vicious power struggles for the higher ranks.”
Christine says that it was clear that Sam’s brain trust was very close, and that they would all get in the hot tub together to talk philosophy and effective altruism. Other reports would claim that Sam had dated several FTX employees in the Bahamas. “But I don’t think there were any orgies going on,” she says. “Every time I hung out, it was the most boring conversations ever. A bunch of nerds talking about card games, chess, board games, philosophy, and math.”
Christine was first invited to the penthouse for dinner in December 2022. Sam talked endlessly about effective altruism and his theories about risk. “He thought people were too risk averse,” Christine says. “He said that you need to take decisions that can move you three steps forward or half a step back.”
It was a short 12-minute ride from Sam’s penthouse to the Veridian Corporate Center, where FTX had spent at least $10 million on office space. FTX didn’t just work there but served as a landlord to other crypto companies that hoped their proximity to FTX’s overwhelming successes would rub off on them.
Sam sometimes slept in a beanbag there rather than going home to his penthouse or his other apartment in the Albany that even some FTX executives didn’t know about. While he was spending more and more time on PR and self-promotion rather than the actual day-to-day operations of his company, he still was running on an all-hours, all-consuming work schedule, and his employees were likewise expected to embrace this mentality. Many employees worked for upwards of 12 hours a day, seven days a week. FTX’s offices were stocked with vegan egg substitute and bottles of Soylent, which employees would sometimes drink for entire days so as to not waste time with food decisions or eating.
“He doesn’t believe in taking vacations,” says Natalie Tien, FTX’s head of PR and marketing who also served as Sam’s assistant. “If you’re not in his visible sight for more than two weeks, just assume that you’re not in the company anymore.”
FTX’s staff of around 300 people was now managing a multibillion-dollar company that held the wealth of people around the world. But Sam still treated the company like a scrappy startup: He placed people in jobs for which they were not qualified and expected them to figure it out. Other roles were simply unfulfilled.
On the other hand, Sam had no problem with hiring people he was close to—including his own father, Joe Bankman. Sam put him on payroll in December 2021 as an advisor on corporate and tax matters, and bought him and his mother, Barbara, a $16 million, 30,000-square-foot waterfront house in the Bahamas using funds from an FTX Trading bank account. Yet his father still complained about the size of his new paychecks. “Gee Sam, I don’t know what to say here. This is the first [I] have heard of the 200K a year salary!” he wrote in an email that was later unearthed by FTX’s bankruptcy team. “Putting Barbara on this.”
By the middle of 2022, stress and sleeplessness had transformed FTX’s new headquarters from a Caribbean paradise into a hornet’s nest. The lack of an HR department or real job titles meant that employees fought over job territory and worked furiously to curry favor with Sam. “It all boils down to what Sam thinks is right or wrong: He is basically the monarch and the dictator,” Christine says.
Natalie Tien says that the company’s “flat” structure really meant that people got very territorial. “It’s sort of creating a very toxic vibe that people feel like they have to fight for their job,” she says. “Your colleagues became your friends, enemies, roommates, and your social circle.”
The mood turned so sour that Sam decided to put his own psychiatrist, George Lerner, on payroll. Lerner’s presence did little to reduce the growing stress of working in FTX’s pressure cooker. As Lerner listened to the employees’ many grievances, he also became increasingly concerned about Sam’s own mental health and advised him to improve his sleep, diet, and physical activity. Sam responded that he didn’t care about his long-term health—and that he felt he had a five-year window to make as much money in crypto as he possibly could.
In the middle of 2022, long-promised employee bonuses were put off for months. Sam justified their delay by saying he was simply too busy to organize them. He was excelling in presenting himself to the world. But in being a competent internal company leader, he was failing disastrously.
Christine Chew says she began to feel increasingly lonely and isolated. Work and play blended together; her teammates and superiors were inescapable. “I believe I’m not the only one who felt this way,” she says. “That’s why many people, when they have time, they’re just drinking excessively until they cannot handle it anymore.”
Christine told Lerner about her problems at the company and feeling a lack of purpose. “He told me, “Everyone feels lonely in FTX,’ so you’re not alone,” Christine says.
Christine realized she had strayed extremely far from her initial mission to help people. She wasn’t even donating her salary to charitable causes, as many effective altruists at FTX, including Sam, no longer believed it made rational sense to give away money from each paycheck. Instead, they thought that it was more effective to take the money they earned and invest it—so they’d be able to give far more money later on.
Christine eventually realized these actions looked identical to those of any money-obsessed trader with no higher purpose. She bounced around from project to project, unable to break into FTX’s power structure—and was fired in April 2022. She spent the next couple of weeks traveling in Europe, trying to make sense of her eight-month stay in the Bahamas. She knew that FTX was poorly run and dysfunctional in many ways. But she still believed in Sam Bankman-Fried’s vision of becoming the Robin Hood of the American financial system.
Excerpted from Cryptomania: Hype, Hope, and the Fall of FTX’s Billion-Dollar Fintech Empire. Copyright © 2024, Andrew Chow. Reproduced by permission of Simon Acumen, an imprint of Simon & Schuster, LLC. All rights reserved.