’Tis the season for giving: What does the FTX collapse mean for ‘effective altruism’?

The expression long precedes the shenanigans of the crypto world, writes Hamish McRae

Many people looking at the mess created by the collapse of FTX will be tempted to think of effective altruism as a cover for catastrophic commercial practice (Getty Images for CARE For Specia)

Christmas is a season for giving – and for many charities, it is the most important time of the year for raising funds. But this year, the collapse of the cryptocurrency exchange FTX has provided a new perspective on the role of charities in our society, and an uncomfortable one at that.

The reason is that FTX’s founder, Sam Bankman-Fried, has been both a substantial donor to charitable causes but also an enthusiastic supporter of the concept of “effective altruism”, the rough idea being that people should make money in order to be able to give it away.

Many people looking at the mess created by the collapse of FTX will be tempted to think of effective altruism as a cover for catastrophic commercial practice. If billions suddenly go missing, or were never there in the first place, then the moral backcloth of the whole operation seems a bit phoney.