Sam Bankman-Fried is the richest person in cryptocurrency, amassing more than $22 billion before the age of 30, according to Forbes.
So, how does he stay grounded amid all that wealth?
He said giving away some of his money — in cryptocurrency, of course — helps him remember what’s important.
“If the goal is to give yourself a lot of consumptive pleasure through money, you run out of ways that are efficient,” Bankman-Friend told USA TODAY. “If you look at the world’s problems, there are tens of trillions that could be spent.”
Bankman-Fried, an MIT graduate and former Wall Street trader, started a crypto trading firm in late 2017 and then a year later started FTX, a cryptocurrency exchange that allows traders to buy and sell digital assets.
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Bankman-Fried said that during the past three years he’s given between $20 million and $30 million to charities that fight global poverty, malaria and cystic fibrosis as well as those that help animals. He said prior to that, he had given $1 million.
“I try to give a decent amount each year and part of that is to stay grounded and be connected to what I’m doing in the first place,” he said.
Bankman-Fried, ranked the 32nd richest person in America by Forbes magazine, has embraced “effective altruism,” a notion of doing the most good possible.
He’s not alone among young crypto investors who have given away some of the fortunes made in cryptocurrencies, digital money created and exchanged over a decentralized computer network where transactions are secured and verified through coding.
Bitcoin bull market
Several nonprofit organizations have been the beneficiaries, accepting cryptocurrency gifts through companies like The Giving Block, founded in 2018 by Wake Forest University graduates Alex Wilson and Pat Duffy.
Wilson and Duffy said their company was formed after the cryptocurrency bull market of 2017-18, which created a great deal of wealth for investors who were looking for ways to give back. Bitcoin, considered the original cryptocurrency, was created in 2009 on the heels of the Great Recession.
Charities that have used The Giving Block include Save the Children, No Kid Hungry, United Way and the American Cancer Society as well as a few churches.
The Giving Block’s client base has grown from 30 to more than 250 in the past year, according to the company.
Alex Wilson, the other co-founder, said individuals who have done well by investing in crypto can receive a tax deduction for their nonprofit or church gifts, which can reduce taxes of up to 37% when cashing out crypto investments.
Wilson added that many of the donors that use The Giving Block are millennials (born between 1981 and 1996) or Gen Z (born between 1997 to 2012)
Wilson said several nonprofit charities were more willing to accept crypto donations last year when the global pandemic hurt traditional fundraising efforts, and he expects to receive tens of millions of crypto donations this year compared with a couple hundred thousand in 2019.
“For some organizations, especially last year, this has kept them going,” Wilson said.
Cashing out bitcoins at United Way
Edwin Goutier, vice president of innovation for United Way Worldwide in Alexandria, Virginia, said in 2014 his organization was one of the first and largest charities to accept cryptocurrencies.
Goutier said his organization then had about $70,000 worth of bitcoin, but cashed it out.
“If we had just sold half, we would be sitting on a great amount of money that we could invest today,” Goutier said. “At the same time, with the rules for nonprofits and all the challenges we have in our communities, we have to leverage funds in the moment. So, that’s how I bring myself from kicking myself too hard.”
He added that the United Way can accept several different coins for donations.
Goutier said what makes The Giving Block so successful is that Duffy and Wilson “understand both sides of the marketplace” with donors and nonprofit charities.
Bitcoin is political
Another donor who has given away cryptocurrencies to nonprofit charities is Meltem Demirors, chief strategy officer of CoinShares, a digital investment firm with $4 billion in assets,
Demirors, who said her parents were beneficiaries of charities and public aid, tries to give 10% of her income to charitable causes. She said she uses that percentage as a benchmark in order to be intentional in her giving.
Demirors also said she encourages her female friends to give generously to charities and then ask for a “seat at the table” of that nonprofit organization.
She said some of her favorite charities are those designed to educate women in foreign countries and to provide clean drinking water.
“Bitcoin is inherently political in nature and those in bitcoin likely can use the capital to create the type of world they want to live in,” she said.
Demirors said she receives a few fundraising requests every week from nonprofit organizations.
“As my career progresses,” she said, “I intend to ramp up my charitable giving.”
Have a tip on business or investigative stories? Reach the reporter at craig.harris@usatoday.com or 602-509-3613 or on Twitter @CraigHarrisUSAT
This article originally appeared on USA TODAY: Bitcoin investors give more wealth from cryptocurrencies to nonprofits
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