The implosion of the leading cryptocurrency exchange will not affect the wider economy, but it will affect tech elites and the Effective Altruism movement, which sought to reform philanthropy.
The collapse of FTX will have a major impact on the cryptocurrency sector and, as a result, on the strategies and futures of the Silicon Valley elites who have increasingly tied their fortunes to it. Venture capital firm Andreessen Horowitz, for example, aggressively incubates cryptocurrency startups, with investments totaling over $7.6 billion. Mark Zuckerberg’s Meta (formerly Facebook) has twice attempted to enter the cryptocurrency market directly, first with the native cryptocurrency Diem (originally called Libra), then Novi, a cryptocurrency wallet. It is still aiming for “deep compatibility” with blockchain technology. Any cryptocurrency-based strategies will become harder not just because of the loss of a major institution and a drop in cryptocurrency prices, but because the incident will invite the further intervention of regulators in the U.S. government.
But most importantly, the collapse of FTX will reduce the moral authority and intellectual legitimacy of the “Effective Altruism” (EA) movement, which has become a rising cultural force in Silicon Valley and a rising financial force in global philanthropy. Sam Bankman-Fried was a highly visible example of an “Effective Altruist.” He was a major donor both to the movement and to causes favored by the movement, for example committing $160 million in grants through the FTX Future Fund. Bankman-Fried also frequently boosted its ideology in press interviews and reportedly only earned money so that he could donate more of it to the cause, an ethos known as “earn to give” that was invented by the EA movement.
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