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Psychotropic drugs and the bankruptcy of cryptocurrency giant FTX

23/11/2022

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The Conversation

Gonzalo Arrondo

researcherin the groupMind-Brain of Institute for Culture and Society, University of Navarra

The cryptocurrency world has been rocked this month by the economic collapse of exchange platformFTX and its sister crypto investment company, Alameda Research.

In the deadline of one week, FTX has gone from being the third largest business in this sector, in terms of issue users and volume of exchange, to declaring bankruptcy.

Similarly, its founder and main shareholder, Samuel Bankman-Fried (also known by his initials SBF), lost an estimated net worth of more than US$10 billion and became insolvent.

FTX's downfall has been attributed to negligent economic practices, a poor and disorderly management style, excessive expense in advertising and real estate, and SBF's excessive weight within business, as well as his peculiar personal characteristics. For example, SBF lived in a luxury apartment with 10 friends and had held work meetings while playing online video games.

There is one aspect that, however, has been little discussed. This is the possible relationship between the drop in FTX and the consumption of nootropics, i.e., drugs aimed at improving cognitive functions by SBF and, in general, at business.

The illicit use of psychotropic drugs that are not harmless is strongly advocated by transhumanist currents. But it is also known to be widespread, for example, among students seeking to effortlessly improve their school performance.

The use within companies has been less studied. This aspect of the FTX case has been dealt with in particular depth by the American psychiatrist Scott Alexander. Specifically, there are indications that SBF used both monoamine oxidase inhibitor drugs (MAOIs) and stimulants. To top it off, he also recommended the use of cognitive enhancers by employees in the work environment.


What are the effects of these drugs?

MAOIs seek to prevent an enzyme from degrading excess dopamine, serotonin and noradrenaline in the nervous system. As a result, they allow more dopamine (the neurotransmitter of motivation) available. They are a subject psychotropic drug used for the treatment of mental disorders, such as depression or anxiety, and also neurological disorders, such as Parkinson's disease.

On the other hand, stimulants are used to treat problems such as attention deficit hyperactivity disorder (ADHD) or narcolepsy. Their mechanism of action is also related to increasing brain levels of dopamine and norepinephrine.

Stimulants, used correctly, are considered safe drugs, although they can cause moderate side effects such as sleep problems, decreased appetite, tachycardia and also changes in mood or mood. MAOIs can also cause similar side effects. However, their proper management is much more complex, as they can interact dangerously with other drugs that modify serotonin or dopamine levels, as well as with some common foods and beverages.

SBF chronically sought to increase its dopaminergic levels to improve its performance, work capacity and attention using drugs that, although safe if used under medical supervision, are by no means harmless.

Dopamine is a critical neurotransmitter for multiple brain circuits and functions such as movement, motivation or mood. All these systems are in status of homeostasis, i.e. balance. This implies that the modification of dopamine levels in one of them will have consequences in the others that are difficult to predict.

Thus, in many cases, the challenge in psychiatric therapy is to find the medication that leads to a reasonable balance between symptom reduction and side effects on the other systems. In particular, an excess of dopamine can lead to consequences as varied as hallucinations, symptoms of psychosis (paranoia, delusions, magical thinking and, therefore, loss of a sense of reality), euphoria and symptoms related to impulsivity.


Could psychostimulants have influenced the drop in FTX?

There are different plausible mechanisms by which stimulants could have been related to FTX and Alameda cryptophiasis. Changes in dopamine have been related to modifications in risk perception and time-associated devaluation.

There is work in the scientific literature, both in neurological patients and in healthy controls, indicating that dopaminergic increases tend to be associated with people taking more risks. Simultaneously, these people value rewards more in the short term than in the long term deadline (one example of many was conducted by our group from research). Many of the FTX and Alameda Research decisions involve short vs. long deadline investments, so small changes in this perception could have had profound economic effects.

Similarly, increased dopamine levels are also associated with compulsive shopping and gambling addiction. It is not difficult to characterize what occurred in FTX as a case of transactional compulsivity and pathological gambling.

In the case of stimulants, recentprograms of study indicate that their effect in healthy people is more related to a feeling of increased productivity and greater speed, but also to an increase in the issue of errors and a reduction in efficiency. A business investment requires a balance between the number of operations performed and their reliability, as small errors can have catastrophic consequences.

Similarly, although their consumption leads to a subjective feeling of energy without the need for rest, this does not imply that the body experiences it in the same way. Using cognitive enhancers to increase performance can lead to sleep deprivation and chronic fatigue, which in turn can alter deadline the decision-making capacity.

In addition, the combination of MAOIs and stimulants is especially discouraged. It is difficult to predict what their effect on these behavioral variables would be, but it is possible that it would be multiplicative in many cases.

It seems to be proven that SBF was taking various psychotropic drugs with the goal of his cognitive improvement, with no indication that there were medical reasons for this.

In any case, it is difficult to know to what extent SBF's taking (and recommending taking on his business) psychotropic drugs directly influenced the recent economic debacle. It is not clear exactly what drugs he was taking, nor their dosage, and these drugs may have varying effects on different people. But the mere possibility should serve as a cautionary grade and help us reflect on the ethics or consequences of taking drugs with the goal of achieving neuromeasurements.

This article was originally published in The Conversation. Read the original.

The Conversation