In this episode of the podcast, I sit down with an ex-lawyer who is currently serving a sentence in a federal prison in Portland, Oregon. We talk about his experience in prison, what it's like to be in a prison, and what he's looking forward to in the future.
00:00:44.200You know, the fortunate thing, the place I'm in, I'm not in sort of, I'm not in physical danger.
00:00:50.780And, you know, frankly, a lot of the staff, they're trying to be helpful.
00:00:54.720They're trying to, you know, do what they can, given the constraints.
00:00:58.180But, you know, no one wants to be in prison.
00:01:02.560And you can imagine what happens when you take sort of 40 people, you know, all of whom have been at least charged with crimes and walk them in a single room for years on end and throw out the key.
00:01:14.640Which is, the most trivial things become all that people have left to care about.
00:03:52.800My mind was racing because there were, you know, a billion things to keep track of.
00:03:57.900You know, we sort of typically I'd have and back when I was running FTX, you know, I go on to have an interview.
00:04:02.720But, you know, while on the interview, there would be two issues I'd have to resolve with the company.
00:04:07.500So I'd have sort of one eye on Slack open, responding to messages.
00:04:12.060And I knew that I had something else I had to do right after the interview that I hadn't had time to prepare for yet that I was sort of preparing for in the back of my mind.
00:04:21.920So maybe like the digital world is bad for us.
00:04:25.800Is that I mean, like, what's what's your view of that?
00:04:28.100You've been taken away from your phone.
00:04:33.600I I prefer having the digital world that, you know, at the end of the day, like it's but but I will say that when I say that it's less from a perspective of like enjoyment or or or, you know, pleasure or leisure.
00:04:47.920And it's more from a perspective of productivity and ability to have impact in the world.
00:04:54.340You know, from that perspective, it's so hard to do anything.
00:05:16.200You know, it's sort of a combination of a few other high profile cases and a lot of, you know, ex-gangsters or sort of, you know, alleged ex-gangsters.
00:11:23.760So, I mean, big picture, without getting into all the details of your case, but it does seem like you guys made a decision at your company to form political alliances through political donations, which is not singling you out.
00:11:41.420You're hardly the only businessman who's done that.
00:14:38.580He wanted his agency to get more power.
00:14:41.060Even if he didn't want to do anything with it except block industries.
00:14:46.360You know, why did he make everyone register with him while he loses power otherwise?
00:14:52.020Even if he didn't know what to do with them.
00:14:54.360You know, he had – there are lots of stories about him, you know, being very politically ambitious and feeling like if he could, you know, get on CNBC enough, make a big enough stink about things, raise his profile that, you know, maybe he'd be treasury secretary, something like that in the future.
00:15:42.060So when things started to go south and you were criminally charged or thought you might be criminally charged, you know, you've given so much money to the Democratic Party that I think it's pretty – leaving aside moral judgment here.
00:15:55.240But it's pretty normal in business for the donor to call the person he's donating to and saying, hey, I'm in trouble.
00:16:12.140One was, you know, I didn't want to do something inappropriate.
00:16:17.200A second was I – that many parts of it very quickly made their positions known and were running away as quickly as they could.
00:16:28.340But, you know, I had a good relationship, probably better with Republicans in D.C. as with Democrats by that point in time, although that wasn't public thought.
00:16:40.340It wouldn't have been easy to see that from the outside.
00:16:44.220And at the end of the day, there's a long story here.
00:16:48.460It involves a law firm that took a pretty unusual and active role in the case.
00:16:53.440But before I even gave up control of FTX, before it was ever filed for bankruptcy, the DOJ had already made up its mind.
00:17:04.860And so there was – you didn't call in any favors or try to?
00:17:47.620There are a lot of things that, you know, were very different from the stance that the Biden administration took, that, you know, Gensler and the SEC took.
00:17:55.820Obviously, you know, the follow-through is what matters.
00:17:58.500And that's the stage that we're at now, which is what will come of this.
00:18:01.640And, I mean, not surprisingly, like, changing the guard helps.
00:18:10.160But financial regulators, they're big, giant bureaucracies in the federal government.
00:18:15.620They're not used to changing overnight.
00:18:18.960And they have been playing a really obstructive role for, you know, a decade in crypto.
00:18:27.600You know, the U.S., it's 30% of the world's finance.
00:18:32.220And the reason it's entirely regulatory.
00:18:35.600It's just the U.S. was unique in its difficulty to work with.
00:18:40.040So I think the big question is, will, you know, when rubber meets the road, like, will the administration do what needs to be done and figure out how to do it?
00:18:50.760I mean, I remember when the concept of crypto first arrived in the popular press, and the whole idea was that this was a currency that could restore to the individual his freedom of commerce.
00:19:06.880I get to buy and sell things without the government controlling me, and I could do it privately.
00:19:31.600And there's sort of a related thing about the technology, right?
00:19:34.780Payments, remittances, like all the things that are not just an investment, but ways that crypto could actually be useful for the world.
00:19:44.240You know, they happen on longer timescales than investments do, basically.
00:19:47.640You know, with what social media has become, you see bubbles, you know, grow and pop and grow and pop on a daily to monthly basis.
00:19:57.200Technology is built out on a decade basis.
00:19:59.700So, you know, right now, crypto is not quite at a point where it could become an everyday tool of, you know, a quarter of the world or something.
00:20:11.180The tech isn't there yet, but it's not that far away.
00:20:14.520And if – and this is an if – if the industry keeps making progress rather than getting distracted too much by market prices, then, you know, five, ten years from now, you can imagine a world where all of a sudden it is the case that anyone can have a crypto wallet.
00:20:31.740You know, you know, a billion people could use it each day with privacy, with security, fast, cheap, international, all the things that, you know, that was promised and that absolutely get – are distracted from by the latest meme points.
00:20:48.800You think world governments would allow that?
00:20:53.260I mean, if you actually allowed the world's population to conduct financial transactions without the control of governments, then governments would collapse instantly, wouldn't they?
00:21:08.080And there are a lot of degrees here about the level of oversight and control that a government have.
00:21:13.280You look at something like Bitcoin and the wallets are anonymous, but there is a public ledger of every transfer that happens.
00:21:20.420So it is possible for governments to have some level of knowledge without having control of it.
00:21:29.020That being said, not all the governments in the world view this the same.
00:21:33.820And the United States government over the last 30 years has taken one view towards control of, you know, the – not just the United States, frankly, but the world's monetary, you know, dealings.
00:21:47.600And you see, I mean, a different viewpoint, much more authoritarian, but also much more insular in a lot of sort of dictatorships.
00:21:57.600But half the world doesn't try to have nearly the level of government involvement in day-to-day financial transactions that the United States has.
00:22:08.560So the people who built this country built it because they wanted freedom.
00:26:59.02010 years ago, the answer was clearly yes.
00:27:02.060Or, at least, yes, relative to the scale of the industry.
00:27:05.360You know, you look in the, you know, 2014 to 2017 sort of era.
00:27:09.820And there is not, you know, the industry is a lot smaller than it was today.
00:27:15.840And, and a lot of the transactions I saw, or at least a higher fraction of them, were, well, different people use different words for it.
00:27:24.640But, Silk Road, you know, as an example, right, people purchasing narcotics online was a common use of crypto back 10 years ago or so.
00:27:38.480Obviously, there are always going to be criminals in any industry.
00:27:40.780But, over time, the fraction of the industry that that represents has fallen off really substantially, both because of sort of growth of other areas of interest in crypto and also because of more government involvement on the anti-money laundering side.
00:27:58.820So, yeah, there are still some, but not, it's not as, as prevalent as it once was.
00:28:04.060So, you were famously identified with a worldview and ideology, maybe even a religion called defective altruism.
00:28:12.780And the idea was that, as I understand it, that you, you know, do the greatest good for the greatest number.
00:28:18.180You make money in order to help the maximum number of people.
00:28:21.680And some have pointed out the irony that in the collapse of your company, like a million people lost their money.
00:28:26.720So, there were a lot of individuals hurt in an effort that you described as, like, the greatest good for the greatest number.
00:28:34.480And I wonder if all of this has made you rethink the precepts of effective altruism.
00:28:40.020It hasn't made me rethink the precepts.
00:28:42.280Obviously, I feel terrible about what happened.
00:28:47.260And whatever one's intentions are, I, you know, if you screw up, then the results might be different.
00:28:56.020You know, people have their money back at the end, but it is too excruciating years waiting for it.
00:29:02.100They got it back dollarized rather than in kind.
00:29:04.660And certainly, all of the good that I've been hoping to do for the world ended up dissipating, or at least most of it did, when the company collapsed.
00:29:18.820I guess what I'm saying is do – I mean, I think it's hard for most people to understand the idea that it's more virtuous or valuable to help people they've never met than it is to help the people right in front of them.
00:29:34.660In other words, like, it's way more virtuous to help your wife, girlfriend, mother, daughter, brother, college roommate than it is to help, like, a village in a country you've never visited.
00:29:46.300I think that's how most people feel intuitively.
00:29:50.440I disagree, although there is a caveat to it, which is that, you know, a classic mistake which people make, and I may have made at some points, is with people who you don't know who are distant from you,
00:30:03.540thinking you know what they need when you don't, you know, being paternalistic, kind of condescending.
00:30:09.400And, you know, there's so many foreign aid-type projects that have gone awry and ended up being complete wastes of money because no one knew the people they were giving to.
00:30:19.020No one knew what their lives were like.
00:30:24.380And, you know, they show up with, like, a bunch of water pumps to a village that has plenty of water and no food.
00:30:29.920And, like, you know, all these people shipped in from Harvard to go hand out these water pumps no one wants.
00:30:34.660And, you know, there's, like, example after example of this going awry, whereas, obviously, like, when you're dealing with people you know, you know, you have a much better sense of how to help them.
00:30:48.280And, you know, even if I think the life matters as much in one place as another, that doesn't mean that you know as well how to help one as you do the other.
00:30:56.620Well, see, I think you're sort of making a counter case.
00:31:01.240You're arguing against your own position.
00:31:02.620I mean, isn't it – I mean, I guess the problem I have with the effect of altruism is just too easy.
00:31:06.640I mean, it's like it's easy to cure polio.
00:31:09.300It's really hard to make the same woman happy for 30 years.
00:31:12.940And so maybe it's better to do the hard thing.
00:31:15.960Well, I think what I'd say is, look, you look at – I mean, malaria is a good example here, right?
00:31:21.740No one dies of malaria anymore in the United States.
00:31:31.840Like, this is just a disease people shouldn't be dying from anymore.
00:31:34.640We know how to basically eradicate it.
00:31:36.880And we should absolutely be doing that as a world.
00:31:39.400But, you know, because it's sort of like easy in some sense, that shouldn't stop us from being able to help people, you know, at home.
00:31:48.940And you look at, like, the scale of resources that would be required to many of these, you know, interventions in the poorest part of the world.
00:32:33.660But, you know, at the end of the day, we have responsibilities to each of us.
00:32:38.760And, you know, if I know my cousin well and I know how to solve his problem because I'm his cousin, then absolutely, like, I have a responsibility to do that.
00:32:46.680But if I've tried and I'm flailing at that, I can't figure out how to make progress, but I can figure out how to save lives internationally, or if someone can, then I don't think it takes away from the good that they can do internationally that they couldn't figure out how to solve their cousin's problem.
00:33:27.000You know, actually, malaria is a good example where a substantial fraction of the world's malaria has been cut down already by mostly private contributions from people to South Saharan Africa and India that, you know, saving probably hundreds of thousands of lives a year right now for, you know, thousands of dollars per life on average, which is, you know, sort of a stunning success on a relative scale.
00:33:53.600Now, we're not talking about a trillion dollars.
00:33:56.460We're talking about single-digit billions of dollars directed by really careful work by philanthropists.
00:34:02.880And, you know, of course, you can look at gigantic government programs that did absolutely nothing.
00:34:10.540You know, if you want to go to the government approach, I mean, I don't know, the Marshall Plan, like, that's sort of digging pretty deep in history.
00:34:18.260But rebuilding Germany after World War II was probably a huge success on many fronts.
00:34:26.600Yeah, I think we've undone it by blowing up Nord Stream.
00:34:31.880But, yeah, no, I think it's a fair point.
00:37:02.420So, I mean, it strikes me there's a kind of weird, it's, I mean, you went maybe more than anyone I've ever talked to from one world to a completely different world.
00:37:11.120So you were in the world of digital money.
00:37:15.180What's the medium of exchange in prison?
00:37:18.060I, you know, it's whatever people have, and, you know, muffins, like these little, so they're like little plastic wrapped.
00:37:25.720You go to, like, a gas station, and, like, on the counter there might be, like, a plastic bowl with little individually wrapped plastic muffins that have been sitting there for a week at room temperature.
00:37:38.700That's sort of, that's like standard, is that a packet of ramen soup or a kind of disgusting-looking little foil package of fish in oil at room temperature?