Silicon Valley’s Apathy Towards Sam Bankman-Fried’s Trial
Silicon Valley Shrugs Off Sam Bankman-Fried’s Trial
In the four weeks that Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, was on trial on fraud charges, the tech industry:
- Reacted to the war in Israel and Gaza, including protesting a tech conference organizer’s social media posts about the conflict.
- Buzzed over a manifesto from a top venture capitalist outlining a list of enemies to technological progress.
- Scrambled to invest money in the hottest artificial intelligence company, OpenAI, at triple its valuation earlier this year.
- Hotly debated the new features on Threads, a social media site owned by Meta.
All of which is to say that, despite the involvement of many Silicon Valley insiders in FTX, people in tech were not outwardly obsessed over the ins and outs of Mr. Bankman-Fried’s trial, which ended when he was found guilty of seven counts of fraud and conspiracy on Thursday. They barely mustered a shrug.
The apathy may have had many reasons, including that FTX’s downfall has been well covered by two books, a documentary and multiple podcasts in the year since it happened. But a simpler answer could be that the tech industry has again done what it does best: move on to the next thing.
The industry hasn’t fixated on Mr. Bankman-Fried’s fate because it is no longer fixated on crypto — or web3, blockchain, DeFi, NFTs and other crypto-fied buzzwords that signified the cutting edge just two years ago. They may come back around in a few years. But for now, they are out of style and therefore irrelevant.
The Cycle of Hype and Disinterest
The lack of interest in Mr. Bankman-Fried’s trial reflects a larger trend within Silicon Valley: the industry’s habit of quickly moving past failed ventures and trends without learning from the accompanying mistakes. The tech industry is constantly on the lookout for the next big thing, eager to fail fast and ride the wave of the latest technology trend. As a result, they frequently find themselves repeating hype cycles, pouring money into new ventures and failing to fully analyze the impact of their decisions.
Throughout its history, Silicon Valley has experienced numerous hype cycles, each centered around a new technology or business concept. The cycle typically begins with excitement and media attention, as the technology is hailed as the future of industry and society. Investments pour in, startups emerge, and hype reaches its peak. However, in most cases, the cycle eventually fizzles out, leaving investors with little to show for their money and enthusiasm. The industry moves on, unfazed by the failures.
One notable instance of this pattern was the crypto industry’s collapse in the past year. Cryptocurrencies, blockchain, and other related technologies were once heralded as the future of the internet and presented as solutions to various societal problems. Countless investments were made in this space, fueled by the promise of a decentralized internet and easy financial gains. However, the reality proved to be much different, as the industry quickly became rife with fraud and scams. The crypto market lost billions in value, NFTs plummeted in worth, and major crypto companies faced lawsuits and financial losses. Yet, rather than engaging in self-reflection and acknowledging the shortcomings of the industry, many in the tech industry preferred to view the crash as a normal part of the cycle. They remained steadfast in their belief in the potential of crypto and continued to promote it using different terms and rebranding efforts, rather than admitting defeat.
A Void of Accountability
The lack of accountability within the tech industry is a significant issue that arises from its tendency to quickly move on from failed ventures and its unwillingness to acknowledge failures. When companies and individuals face legal consequences for their actions, the industry often distances itself from any responsibility, opting to focus on new ventures or trends instead. This lack of accountability perpetuates a cycle of repeated mistakes and enables the same patterns of behavior to persist.
One example of this lack of accountability can be seen in the case of FTX and Sam Bankman-Fried’s trial. Despite evidence that investors in FTX were unaware of the risks posed by Bankman-Fried’s separate hedge fund, Alameda Research, and the subsequent downfall of FTX, the court barred scrutiny of the investors’ involvement. Investors were protected from accusations of negligence or gullibility, essentially absolving them of any responsibility for their role in FTX’s operations. This lack of scrutiny allows investors to continue operating without facing consequences for their actions, perpetuating a pattern of reckless investment and a disregard for potential risks.
Additionally, the willingness of investors and venture capital firms to hype investments and gloss over failures contributes to the lack of accountability within the industry. Prominent firms like Sequoia Capital publish glowing profiles of founders and companies they have invested in, contributing to an environment where failure is viewed as a normal part of the entrepreneurial process. This culture of hype enables companies to continue raising funds and attracting investments, even in the face of previous failures.
Conclusion
The tech industry’s apathy towards Sam Bankman-Fried’s trial and its refusal to fully acknowledge the failures of the crypto industry are indicative of its broader trends of quickly moving on from failed ventures and avoiding accountability. This cycle of hype and disinterest prevents the industry from learning from its mistakes and perpetuates a culture of risk-taking without true analysis of the potential downsides. To foster a healthier and more responsible industry, there needs to be a shift in mindset that prioritizes accountability, self-reflection, and a willingness to learn from failures. Only then can the industry break free from its current cycle of repeating past mistakes and move towards more sustainable and impactful innovation.
