Sam Bankman-Fried

Sam Bankman-Fried is the cautionary tale that every discussion of money in politics should begin with — proof that the system will accept donations from anyone, ask no hard questions about where the money came from, and only claw it back after the damage is done. Born in 1992 to two Stanford Law professors, SBF (as he was universally known) studied physics at MIT, worked briefly at the quantitative trading firm Jane Street, and in 2017 founded Alameda Research, a crypto trading firm. In 2019, he founded FTX, a cryptocurrency exchange that grew with astonishing speed, reaching a valuation of $32 billion by early 2022. SBF cultivated the image of an ethical altruist: he slept on beanbag chairs, wore cargo shorts to Congressional hearings, and claimed to be earning money only to give it away through effective altruism. In the 2022 midterm elections, SBF was the second-largest individual donor to Democrats, giving over $40 million to Democratic candidates and PACs, primarily through Protect Our Future PAC. He publicly championed pandemic preparedness and effective altruism causes. But he was also, as later emerged, quietly donating to Republicans through dark money channels — an estimated $20 million or more that wasn't publicly reported. His bipartisan giving was designed to buy friends everywhere, ensuring that whoever controlled Congress would be friendly to crypto regulation. He was simultaneously committing one of the largest financial frauds in history. FTX was commingling customer funds with Alameda Research, using customer deposits to make risky bets, fund political donations, and sustain a lavish lifestyle. When a CoinDesk report in November 2022 revealed Alameda's precarious balance sheet, a bank run ensued. FTX collapsed within days, and approximately $8 billion in customer funds vanished. The fraud was breathtaking in its simplicity: SBF was using stolen money to buy political influence to prevent the regulation that would have exposed the theft. His lobbying for "responsible crypto regulation" was actually lobbying for a specific regulatory framework that would have exempted FTX's offshore operations from U.S. oversight — a framework designed to protect his fraud. SBF was convicted on seven federal charges including wire fraud and money laundering. In March 2024, he was sentenced to 25 years in federal prison. His political donations are being clawed back by bankruptcy trustees, but the damage — the compromised legislators, the tainted policy discussions, the erosion of trust in crypto regulation — cannot be recovered. The effective altruism movement, which SBF claimed as his philosophical home, was severely damaged by association. The lesson: when someone tells you they're making billions to give it away, check whether the billions are real first.