Old-fashioned embezzlement
By 
Bankman-Fried used a relatively recent scam — crypto — as a platform to do just very simple and old school crimes:
U.S. prosecutors on Tuesday charged FTX founder Sam Bankman-Fried with eight counts of fraud and conspiracy, in what they called a scheme to defraud his crypto exchange’s customers and his hedge fund’s lenders.
An indictment by the U.S. attorney’s office for the Southern District of New York, unsealed Tuesday morning, accuses him of misappropriating FTX.com customers’ deposits and using those to pay expenses and debts of Alameda Research, his crypto hedge fund. Mr. Bankman-Fried is charged as well with defrauding the U.S. and violating campaign finance rules for conspiring with others to make illegal political contributions.
Separately, John J. Ray III, the new chief executive of FTX, said at a congressional hearing Tuesday that FTX has incurred losses “in excess of $7 billion.” Mr. Ray, who oversaw the Enron Corp. bankruptcy in the early 2000s, said funds were taken from FTX and misused by affiliated trading firm Alameda Research, which incurred trading losses.
Mr. Ray described Enron as having been brought down by sophisticated people whose machinations aimed to keep transactions secret. FTX, by contrast, presents as “old-fashioned embezzlement,” Mr. Ray said. “It’s taking money from customers and using it for your own purpose.”
Also Tuesday, the Securities and Exchange Commission alleged in a civil lawsuit that Mr. Bankman-Fried diverted customer funds from the start of FTX to support Alameda and to make venture investments, real-estate purchases and political donations. Another U.S. markets regulator, the Commodity Futures Trading Commission, filed a separate lawsuit Tuesday linking his alleged fraudulent conduct at Alameda and FTX to markets that the CFTC regulates.
Dylan Matthews’s complex and thoughtful essay about SBF and Effective Altruism/Longtermism is interesting. There is a significant measure of truth in consequentialism, which is what can make it so dangerous in the wrong hands.