Why Sam Bankman-Fried’s FTX allegedly wanted to buy island nation Nauru

It’s this vision that made an appearance in a lawsuit filed last week by failed cryptocurrency exchange FTX, which is looking to recover more than $1 billion from its founder, Sam Bankman-Fried, and three other executives. The complaint details plans to use FTX funds to purchase the island nation of Nauru, an atoll that is home to more than 12,000 people, and to survive the end of the world by building a bunker there.

The “bunker/shelter” would be used for “some event where 50%-99.99% of people die,” said a memo exchanged between Bankman-Fried’s brother, Gabriel, and an officer at FTX’s philanthropy arm, according to the court document. “Probably there are other things it’s useful to do with a sovereign country, too,” it said. Bankman-Fried’s lawyer did not respond to a request for comment.

Apart from the difficulty of simply purchasing a sovereign state — a representative for Nauru has said it “was not and has never been for sale” — experts caution that it is not an ideal place to live out the end times. The 8.1-square-mile island has limited fresh water, little arable land and imports at least 90 percent of its food. With most of its critical infrastructure on the coast, it is especially vulnerable to extreme weather amid climate change.

“This really shows how much billionaire doomsday prepping is really about fantasy,” Calum Matheson, a professor at the University of Pittsburgh who has studied preppers, said of the FTX plans. For the rich, “doomsday is a fantasy to play with, but they can always keep it at a distance.” It is simply “entertainment,” he said.

This form of escapism, experts say, involves seeing places such as Nauru as a kind of malleable blank slate — never mind the people who already call them home.

“At the very least, these fantasies are about superiority,” Matheson said.

New Zealand — which researchers say is the best place to live out the apocalypse — is reportedly a destination of choice for billionaires and their bunkers. One organization, backed by PayPal co-founder Peter Thiel, has set out to build “startup communities that float on the ocean with any measure of political autonomy,” which at one point included a project in French Polynesia.

More recently, crypto enthusiasts have started transforming an island purchased via leasehold from the government of Vanuatu — a Pacific nation made up of more than 80 islands — into what they call a “blockchain based democracy.”

“Satoshi Island is not a separatist, libertarian or survivalist movement trying to escape from government oversight or possible zombie apocalypse,” a spokesperson for its developers said via email, likening it to “a private membership club or private golf course.”

The Pacific has long held a certain allure for Westerners with a gripe about society’s strictures. In the 1970s, real estate millionaire and political activist Michael Oliver tried to start his own country on an atoll south of Tonga. When that failed because of local pushback, his group made another unsuccessful attempt to set up a society in Vanuatu, all with the goal of creating a libertarian utopia.

U.S. and China battle for influence in Pacific island nations

The idea that islands far from the United States are just lying in wait for new ownership may have been normalized when the U.S. government passed the Guano Islands Act of 1865 — which allows any American who finds large amounts of bird excrement (a rich fertilizer) on an unclaimed island to designate it U.S. territory.

It “set something of a precedent in terms of private citizens claiming islands, mostly in the Pacific,” said Raymond B. Craib, a professor at Cornell University and author of “Adventure Capitalism: A History of Libertarian Exit, from the Era of Decolonization to the Digital Age.”

There is also a long-standing idea, dating back to “Robinson Crusoe,” he said, “of remote islands as laboratories of individualism and freedom from the obligations that come with living with others in a society.” That myth of “radical individualism,” Craib added, “is one that the Silicon Valley crypto-bros have bought into.”

Islands and archipelagoes in the Pacific, many of which gained independence in the 1960s and ’70s, have been mistakenly seen as “friendly to such experimentation because they might be offshore financial centers or tax havens, or politically malleable, or institutionally vulnerable,” Craib said.

John Connell, a professor at the University of Sydney who studies Pacific islands, said the notion that one could simply buy off Nauruans was “a nice neocolonial attitude.”

“It’s like cryonics, isn’t it?” he said of escaping to an apocalyptic bunker there. “There’s a sort of sense of narcissism, that ‘I’m so important I have to live on.’”

To think Nauru would give itself over to tech bros is to fail to understand the country, said Julia Morris, a professor at the University of North Carolina Wilmington and the author of “Asylum and Extraction in the Republic of Nauru.” The Nauruan people fought for independence after living under multiple colonial rulers, and they’ve resisted efforts to help them migrate to a new home with better resources, she said.

“People have very, very strong affinities with the island,” she said. “They are very proud of being Nauruan.”