Sam Bankman-Fried’s Real Victims Aren’t in Crypto

 The dramatic collapse of FTX and the recent arrest of crypto mogul Sam Bankman-Fried continue to send shockwaves around the world, including among many nonprofits and charities. My organization, 1Day Africa, received money from FTX’s charitable arm, the Future Fund. I am struggling with what to do next.

The grant was awarded to support vaccine equity and pandemic preparedness advocacy work in Africa. 1Day Africa aimed to use the money to push for a pandemic insurance fund, an international fund that would receive annual contributions to be used to purchase vaccines for all people during the next pandemic—especially for those in poor countries who have struggled to acquire COVID-19 vaccines.

Five African nations proposed a vote on the idea in 2021 and 2022, but nothing came to the floor of the World Health Organization’s World Health Assembly (WHA). Liberia, Ghana, Guinea-Bissau, Sierra Leone, and Gambia all submitted national requests to the WHA for inclusion of a supplementary item to its agenda. This was done according to WHO’s rules, even though we did not get the proposal on the agenda. There was, and there is, a great need to have other executive board members of the WHA endorse and submit the proposal. Clearly, more advocacy work is needed. This is a long-neglected issue, one I lived through myself as a Zambian. I was elated that there was finally financial support that could help turn the tide.

Much has rightly been written about the suffering that FTX’s fraud caused, and I feel for those who lost their personal funds and savings. But there is another group that will suffer as a result of this fraud as well: vulnerable and poor people worldwide who were lined up to benefit from the projects that FTX funded.

This includes many projects Future Fund supported that were meant to uplift the welfare of others, improve quality of life (especially in poor countries), and save lives. There was money set to help eliminate lead exposure for children worldwide, to help gifted children in poor regions of India excel, and to help develop a wide array of new vaccines, which may never materialize or may be left in legal limbo. For the organizations that did receive promised funding before FTX’s bankruptcy, there has been talk of clawbacks of grant money, but only time will tell.

Even though the clawbacks are also being targeted at nonprofits and charities, there was no logical way for them to know that the money was dirty. At a distance, everything looked solid—Bankman-Fried was a billionaire who was, until the scandal hit, promoted by the mainstream financial press as a genius. Organizations, especially those operating in developing countries, cannot be expected to do due diligence that the media doesn’t do. Furthermore, the panic and anguish that organizations like mine are experiencing must be understood from the point of the grant-application process. Grant applications involve a considerable amount of time and effort, which makes replacing grants within a grant cycle very difficult—without any guarantee of success.

Even beyond the legal considerations, we are now left to grapple with the question of whether spending tainted money, even for humanitarian ends, is justifiable. Does justice demand it be set aside? Does it matter if the money would be returned to institutional investors with billions of dollars or individuals who lost their savings?

As a person who lived in a house without electricity growing up—a person who walked about three miles one way to get to school in first grade at my primary school, crossing rivers and navigating through bushes—I have come to fervently appreciate the impact made by grants in uplifting and saving lives in poor countries. There is abundant, justifiable outrage toward FTX and Bankman-Fried, but the outrage must be informed by the plight of the secondary victims as well, for whom plans were made and money disbursed, and for whom nothing will be done.

The tragedy of FTX’s collapse for nonprofits and charities is an inevitable result of the fact that global governance fails to justly distribute resources and address inequalities. I was delighted to read about how the Open Philanthropy movement sees the situation in the light of the people who continue to need help. They have indicated that grantees impacted by the FTX collapse can apply for grants even though the focus of the grants is primarily on longtermist work.

Meanwhile in Africa, hundreds of thousands of lives are lost to HIV, tuberculosis, malaria, and diarrheal diseases every year. To me, these are victims not only of this one scandal, but also of the continual neglect by many who are in a position to help. Getting assistance is not an entitlement, but if we aspire to a common humanity, then the plight of everyone must be in frame.

The state of things—where the survival of hundreds of thousands of people has to depend on individual philanthropists while governments abdicate and look the other way—must change. But we are still left with a system in which a handful of individuals can have massive sway over global public good. Their generosity should be lauded, but it’s an unstable system. At the very least, we must ask: Why are there relatively few willing to operate on the scale of Bill Gates or Open Philosophy’s Dustin Moskovitz? The FTX fiasco should remind us of the fragility of a system built on the generosity of the rich.