In the spring of 2022, Sam Bankman-Fried, the founder of the bankrupt crypto exchange FTX, made Chicago its U.S. headquarters, drawing the applause of the city’s mayor.
“This is a mechanism and a tool to bring traditionally underrepresented and ignored populations into the world of crypto so they can take ownership and control of their own financial destiny,” said Mayor Lori Lightfoot at the ribbon-cutting ceremony at the opulent, 9,000 square foot FTX headquarters in May. “I think the sky is the limit.”
The reason FTX.US chose Chicago was, in part, to use the city to pilot a cash giveaway program aimed at poor African American residents. FTX was essentially contributing to two ”guaranteed basic income” programs, one run by a nonprofit called Equity And Transformation (EAT), and the other by the city.
Ostensibly a charitable exercise, the program, which FTX also ran in Florida, expanded the market for FTX’s app, and appears to have been a crucial part of a public relations and lobbying effort aimed at winning the support of Democrats for FTX’s agenda to effectively regulate itself.
Bankman-Fried was the second largest donor to both President Joe Biden in 2020 and to Democrats in 2022, after George Soros. There is abundant evidence that Bankamn-Fried’s donations bought influence. After Bankman-Fried testified in May to a Congressional committee chaired by Rep. Maxine Waters (D-CA), she blew him a kiss.
The episode is a cautionary tale about how powerful financial interests use progressive social justice ideology to advance their business interests at the expense of the communities they claim to be helping.
“We, like most nonprofits, are shocked by this because they presented this ‘effective altruism’ model to everyone and seemed to push for racial equity,” said Richard Wallace, the co-founder and executive director of EAT, one of the cash-giveaway initiatives.
The whole strategy was overseen by Bankman-Fried’s father, Joseph Bankman, a Stanford Law professor. I am the first to report that Bankman had been working for FTX from the very beginning. “From the start [of FTX], whenever I was useful, I lent a hand,” said Bankman.
Bankman went on to describe the cash giveaway scheme.