Little discussion of why or how the affiliation with SBF happened despite many well connected EAs having a low opinion of him
Little discussion of what led us to ignore the base rate of scamminess in crypto and how we’ll avoid that in future
For both of these comments, I want a more explicit sense of what the alternative was. Many well-connected EAs had a low opinion of Sam. Some had a high opinion. Should we have stopped the high-opinion ones from affiliating with him? By what means? Equally, suppose he finds skepticism from (say) Will et al, instead of a warm welcome. He probably still starts the FTX future fund, and probably still tries to make a bunch of people regranters. He probably still talks up EA in public. What would it have taken to prevent any of the resultant harms?
Likewise, what does not ignoring the base rate of scamminess in crypto actually look like? Refusing to take any money made through crypto? Should we be shunning e.g. Vitalik Buterin now, or any of the community donors who made money speculating?
For both of these comments, I want a more explicit sense of what the alternative was.
Not a complete answer, but I would have expected communication and advice for FTXFF grantees to have been different. From many well connected EAs having a low opinion of him, we can imagine that grantees might have been urged to properly set up corporations, not count their chickens before they hatched, properly document everything and assume a lower-trust environment more generally, etc. From not ignoring the base rate of scamminess in crypto, you’d expect to have seen stronger and more developed contingency planning (remembering that crypto firms can and do collapse in the wake of scams not of their own doing!), more decisions to build more organizational reserves rather than immediately ramping up spending, etc.
The measures you list would have prevented some financial harm to FTXFF grantees, but it seems to me that that is not the harm that people have been most concerned about. I think it’s fair for Ben to ask about what would have prevented the bigger harms.
Ben said “any of the resultant harms,” so I went with something I saw a fairly high probability. Also, I mostly limit this to harms caused by “the affiliation with SBF”—I think expecting EA to thwart schemes cooked up by people who happen to be EAs (without more) is about as realistic as expecting (e.g.) churches to thwart schemes cooked up by people who happen to be members (without more).
To be clear, I do not think the “best case scenario” story in the following three paragraphs would be likely. However, I think it is plausible, and is thus responsive to a view that SBF-related harms were largely inevitable.
In this scenario, leaders recognized after the 2018 Alameda situation that SBF was just too untrustworthy and possibly fraudulent (albeit against investors) to deal with—at least absent some safeguards (a competent CFO, no lawyers who were implicated in past shady poker-site scandals, first-rate and comprehensive auditors). Maybe SBF wasn’t too far gone at this point—he hadn’t even created FTX in mid-2018 -- and a costly signal from EA leaders (we won’t take your money) would have turned him—or at least some of his key lieutenants—away from the path he went down? Let’s assume not, though.
If SBF declined those safeguards, most orgs decline to take his money and certainly don’t put him on podcasts. (Remember that, at least as of 2018, it sounds like people thought Alameda was going nowhere—so the motivation to go against consensus and take SBF money is much weaker at first.) Word gets down to the rank-and-file that SBF is not aligned, likely depriving him of some of his FTX workforce. Major EA orgs take legible action to document that he is not in good standing with them, or adopt a public donor-acceptability policy that contains conditions they know he can’t/won’t meet. Major EA leaders do not work for or advise the FTXFF when/if it forms.
When FTX explodes, the comment from major EA orgs is that they were not fully convinced he was trustworthy and cut off ties from him when that came to light. There’s no statutory inquiry into EVF, and no real media story here. SBF is retrospectively seen as an ~apostate who was largely rejected by the community when he showed his true colors, despite the big $$ he had to offer, who continued to claim affiliation with EA for reputational cover. (Or maybe he would have gotten his feelings hurt and started the FTX Children’s Hospital Fund to launder his reputation? Not very likely.)
A more modest mitigation possibility focuses more on EVF, Will, and Nick. In this scenario, at least EVF doesn’t take SBF’s money. He isn’t mentioned on podcasts. Hopefully, Will and Nick don’t work with FTXFF, or if they do they clearly disaffiliate from EVF first. I’d characterize this scenario as limiting the affiliation with SBF by not having what is (rightly or wrongly) seen as EA’s flagship organization and its board members risk lending credibility to him. In this scenario, the media narrative is significantly milder—it’s much harder to write a juicy narrative about FTXFF funding various smaller organizations, and without the ability to use Will’s involvement with SBF as a unifying theme. Moreover, when FTX explodes in this scenario, EVF is not paralyzed in the same way it was in the actual scenario. It doesn’t have a CC investigation, ~$30MM clawback exposure, multiple recused board members, or other fires of its own to put out. It is able to effectively lead/coordinate the movement through a crisis in a way that it wasn’t (and arguably still isn’t) able to due to its own entanglement. That’s hardly avoiding all the harms involved in affiliation with SBF . . . but I’d argue it is a meaningful reduction.
The broader idea there is that it is particularly important to isolate certain parts of the EA ecosystem from the influence of low-trustworthiness donors, crypto influence, etc. This runs broader than the specific examples above. For instance, it was not good to have an organization with community-health responsibilities like EVF funded in significant part by a donor who was seen as low-trustworthiness, or one who was significantly more likely to be the subject of whistleblowing than the median donor.
For both of these comments, I want a more explicit sense of what the alternative was. Many well-connected EAs had a low opinion of Sam. Some had a high opinion. Should we have stopped the high-opinion ones from affiliating with him? By what means? Equally, suppose he finds skepticism from (say) Will et al, instead of a warm welcome. He probably still starts the FTX future fund, and probably still tries to make a bunch of people regranters. He probably still talks up EA in public. What would it have taken to prevent any of the resultant harms?
Likewise, what does not ignoring the base rate of scamminess in crypto actually look like? Refusing to take any money made through crypto? Should we be shunning e.g. Vitalik Buterin now, or any of the community donors who made money speculating?
Not a complete answer, but I would have expected communication and advice for FTXFF grantees to have been different. From many well connected EAs having a low opinion of him, we can imagine that grantees might have been urged to properly set up corporations, not count their chickens before they hatched, properly document everything and assume a lower-trust environment more generally, etc. From not ignoring the base rate of scamminess in crypto, you’d expect to have seen stronger and more developed contingency planning (remembering that crypto firms can and do collapse in the wake of scams not of their own doing!), more decisions to build more organizational reserves rather than immediately ramping up spending, etc.
The measures you list would have prevented some financial harm to FTXFF grantees, but it seems to me that that is not the harm that people have been most concerned about. I think it’s fair for Ben to ask about what would have prevented the bigger harms.
Ben said “any of the resultant harms,” so I went with something I saw a fairly high probability. Also, I mostly limit this to harms caused by “the affiliation with SBF”—I think expecting EA to thwart schemes cooked up by people who happen to be EAs (without more) is about as realistic as expecting (e.g.) churches to thwart schemes cooked up by people who happen to be members (without more).
To be clear, I do not think the “best case scenario” story in the following three paragraphs would be likely. However, I think it is plausible, and is thus responsive to a view that SBF-related harms were largely inevitable.
In this scenario, leaders recognized after the 2018 Alameda situation that SBF was just too untrustworthy and possibly fraudulent (albeit against investors) to deal with—at least absent some safeguards (a competent CFO, no lawyers who were implicated in past shady poker-site scandals, first-rate and comprehensive auditors). Maybe SBF wasn’t too far gone at this point—he hadn’t even created FTX in mid-2018 -- and a costly signal from EA leaders (we won’t take your money) would have turned him—or at least some of his key lieutenants—away from the path he went down? Let’s assume not, though.
If SBF declined those safeguards, most orgs decline to take his money and certainly don’t put him on podcasts. (Remember that, at least as of 2018, it sounds like people thought Alameda was going nowhere—so the motivation to go against consensus and take SBF money is much weaker at first.) Word gets down to the rank-and-file that SBF is not aligned, likely depriving him of some of his FTX workforce. Major EA orgs take legible action to document that he is not in good standing with them, or adopt a public donor-acceptability policy that contains conditions they know he can’t/won’t meet. Major EA leaders do not work for or advise the FTXFF when/if it forms.
When FTX explodes, the comment from major EA orgs is that they were not fully convinced he was trustworthy and cut off ties from him when that came to light. There’s no statutory inquiry into EVF, and no real media story here. SBF is retrospectively seen as an ~apostate who was largely rejected by the community when he showed his true colors, despite the big $$ he had to offer, who continued to claim affiliation with EA for reputational cover. (Or maybe he would have gotten his feelings hurt and started the FTX Children’s Hospital Fund to launder his reputation? Not very likely.)
A more modest mitigation possibility focuses more on EVF, Will, and Nick. In this scenario, at least EVF doesn’t take SBF’s money. He isn’t mentioned on podcasts. Hopefully, Will and Nick don’t work with FTXFF, or if they do they clearly disaffiliate from EVF first. I’d characterize this scenario as limiting the affiliation with SBF by not having what is (rightly or wrongly) seen as EA’s flagship organization and its board members risk lending credibility to him. In this scenario, the media narrative is significantly milder—it’s much harder to write a juicy narrative about FTXFF funding various smaller organizations, and without the ability to use Will’s involvement with SBF as a unifying theme. Moreover, when FTX explodes in this scenario, EVF is not paralyzed in the same way it was in the actual scenario. It doesn’t have a CC investigation, ~$30MM clawback exposure, multiple recused board members, or other fires of its own to put out. It is able to effectively lead/coordinate the movement through a crisis in a way that it wasn’t (and arguably still isn’t) able to due to its own entanglement. That’s hardly avoiding all the harms involved in affiliation with SBF . . . but I’d argue it is a meaningful reduction.
The broader idea there is that it is particularly important to isolate certain parts of the EA ecosystem from the influence of low-trustworthiness donors, crypto influence, etc. This runs broader than the specific examples above. For instance, it was not good to have an organization with community-health responsibilities like EVF funded in significant part by a donor who was seen as low-trustworthiness, or one who was significantly more likely to be the subject of whistleblowing than the median donor.