The fall of Sam Bankman-Fried raises the question of whether there are more writers working in the tradition of 19th-century realism. It's this kind of saga that calls out for Trollope, Thackeray, or Balzac: a cryptocurrency titan that has placed altruism and "effective altruism" at the heart of its aggressiveness. Unfortunately, while there are writers of this caliber among us—probably not—the reality can overshadow their talents.
Bankman-Fried's alleged misdeeds are not interesting in and of themselves. No, financial fraud is still very annoying. The "literary" side of the story is that the wider culture did not anticipate their arrival. Quite simply, most Americans seem to have lost the ability to identify sociopaths.
But first the facts. This may seem complicated as the crypto universe is shrouded in a dense fog of jargon and mathematical magic. But what lies underneath is actually not that difficult. Cryptocurrencies are an unregulated and highly speculative asset class whose value to traders hinges on the desire for currencies regulated by a central bank for obscure or utopian reasons.
Until recently, “SBF” (as it is known) operated a cryptocurrency exchange called FTX, a marketplace for trading these currencies, including converting them into dollars. He also ran several other companies, including a commercial venture called Alameda Research. This month , a disclosure in industry publication CoinDesk revealed that SBF was shuffling funds between its various entities, using local cryptocurrency as a common medium of exchange. The announcement prompted a competing exchange to threaten to abandon the national currency.
The whole structure collapsed. As summarized by The Atlantic ,
FTX struggles to withdraw funds from clients. The company, once worth $32 billion, suddenly fell into an $8 billion hole. . . . FTX was never a bank; Customers will be able to recover at least some of their money from bankruptcy courts for the next few years, and SBF could face serious legal consequences.
You can't help but feel sorry for the small investors who lost everything to SBF's blatant scam. Aside from those who prefer cryptocurrencies over regulated currencies for illegitimate reasons, the psychology of the average cryptocurrency investor is quite understandable. According to cartel author Matt Stoller, cryptocurrency advocates are men and women who have come of age after a devastating recession caused by the greed and cynicism of the “respectable” financial industry.
"They" were bailed out and middle-class borrowers were confiscated from their homes. Stoller wrote: "Children of the 2008 financial crisis who enter adulthood with memories of foreclosures and parental layoffs will not be fooled by the notion that hard work will get them ahead. They knew they saw scammers always win." This sense of discontent has fueled the cryptocurrency industry, despite often being backed by pro-Wall Street politicians and regulators.
In this case, however, one has to wonder why more customers don't just look at SBF's personality and wonder if something is wrong. veganism. polyamory. The cheapest Corolla. Dirty hair and dirty clothes. Millions of dollars have been donated to cryptocurrency supporters in national Democratic political races. Commitment to philosophical consequentialism and utilitarianism. Sleeping on stools in the office. General practitioners in the FTX practice. Friendship with Bill Clinton.
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Each of them can be overlooked. But they shouted together: "Claire sociopath".
Perhaps this is the reason for the loss of literary culture. Could the culture that created Becky Sharp in Thackay's Vanity Fair have the moral and psychological capacity to see the red flags regarding SBF? It must be romantic to introduce yourself like that. After all, our culture is as illiterate as its commercial villains: after all, SBF describes itself as a book hater. "I've never read a book," he said in a September interview. "I think when you're writing a book, you stood up and it had to be a six-paragraph blog post."
That statement alone should arrest him if you ask me.