Morally, if it’s found that FTX funded EA through fraudulent activity, is there an imperative to do anything about this? Return funds, support those impacted, etc… Suicide due to a lack of funds is not unprecedented in the crypto space and a ~90% loss of a leading coin may sadly result in loss of life.
How does this impact current EA initiatives relying on FTX-based funding? Is there an urgent need to find other sources of funds to cover important work here?
Is there a need to disassociate EA with FTX because of SBF (he was a director of CEA, spoken about it, and there are other links recently made public such as Will MacAskill’s texts to Elon Musk introducing SBF to be involved in the Twitter deal).
There’s a huge negative sentiment towards SBF ‘playing a white knight’ that I’ve seen on FB/Reddit/HackerNews is leading people to assume EA itself may be fraudulent. Maybe it’s water under the bridge within a week? But maybe it impacts future philanthropy and impacted EA groups losing funding lose trust.
I think when doing any sort of dissociating from SBF, there’s two errors in opposite directions I would like to see EA avoid:
any responsibility on the part of EA should be very clearly acknowledged. I don’t want to get into what sort of responsibility there might be, and I think your questions are a good start. But there’s a tendency for corporate PR to want to airbrush responsibility and the movement’s long term reputation will win if EA conducts itself with integrity.
for integrity’s sake, too, I hope we avoid throwing Sam or anyone else under the bus before the facts are clearly demonstrated. I think you can distance without blaming, and in early stages, that might be the most appropriate action.
I want to acknowledge the challenging time leaders in the space right now must be having. Easy for me to write a list of demands here on a thread, but doubtless more difficult to make the calls. Thoughts are with folks having to make big calls on this right now.
for integrity’s sake, too, I hope we avoid throwing Sam or anyone else under the bus before the facts are clearly demonstrated. I think you can distance without blaming, and in early stages, that might be the most appropriate action.
Yes, I agree. I don’t mean to throw Sam under the bus here. I’m sure his intentions were from a good place. I do mean that this is probably going to become the first time many people hear about EA and that should be handled in some way. If EA becomes synonymous with Crypto fraud then we could see less support from existing people and it is first thing people see when they’re looking into EA (GWWC, EA Funds, etc).
And MacAskill—Singer’s philosophical heir—had the answer: The best way for him to maximize good in the world would be to maximize his wealth.
SBF listened, nodding, as MacAskill made his pitch. The earn-to-give logic was airtight. It was, SBF realized, applied utilitarianism. Knowing what he had to do, SBF simply said, “Yep. That makes sense.” But, right there, between a bright yellow sunshade and the crumb-strewn red-brick floor, SBF’s purpose in life was set: He was going to get filthy rich, for charity’s sake. All the rest was merely execution risk.
EA will be subject to intense scrutiny if SBF viewed reckless and fraudulent behaviour as execution risk for altruistic goals.
Be vigilant of what money is being donated to EA—if it comes from grey area fields (and I say this as someone who’s worked in crypto for a few years, albeit I quit the area earlier in the year). Of course this being EA there’s going to be people arguing the money has been moved to more positive uses, but public image is key to have sustainable donations moving on.
Have a piece about the pros of EA and thank SBF/FTX for their donations but be clear that EA doesn’t knowingly accept money obtained in potentially immoral ways. Now there’s a chance this was all above board and FTX got beaten by a competitor in an unregulated sector, which is of course possible! However there’s a lot of contradictory points popping up about 1:1 backing and the trading firm was very close to an exchange… market information to front run I get, but hopefully they didn’t loan users funds via FTT to trade.
Tangential to #2, there’s a scenario where this ends up as a reputational nightmare for EA.
If SBF committed fraud, there’s a distinct possibility that SBF will use altruism as a defence and/or justification for his actions in the coming months.
If the above happens, the issue may not die anytime soon. Given the scope of the event, and Sam’s prominence within EA, it would become a borderline obligation for any media outlet to mention it in any coverage of EA for years to come.
Depending on how things break, anyone with a public association with EA may be viewed through the lens of either “dangerously overcommitted to utilitarianism,” or “using EA as a cover for unethical behaviour.”
The author that Sequoia paid to write SBF’s puff piece (linked in earlier comment) has already put out a tweet to this effect:
A bad day for #SBF but even worse for #EA. Is this #ultilitarianism as psychological cover to run a #Ponzi scheme?
My concern at this point is the willingness of MacAskill and other prominent EA’s to condemn SBF. “Wait and see” is often preferred, but there may be permanent damage to EA’s reputation if SBF is not disavowed by EA leadership in due time.
If SBF committed fraud, there’s a distinct possibility that SBF will use altruism as a defence and/or justification for his actions in the coming months.
Sadly, I think his having been the second largest donor to the Biden 2020 campaign fund will be a more effective defence. It certainly worked for the people who lost hundreds of billions of Other People’s Money in 2008.
I don’t think that EA’s reputation will be tainted that much by this incident.
First, startups are inherently risky; the purpose of a startup is to try out an unproven business model in the hope of making money or providing value for customers. FTX exposed investors to what many observers, including me, consider an unacceptable level of risk, but so did Theranos (which was an outright scam).
Second, risk neutrality as a consequence of utilitarianism is not well understood outside the EA community. It might become more prominent in the discourse soon, but right now journalists are mostly not talking about it.
How exactly do you disassociate SBF from EA? The guy grew up with two utilitarian philosopher parents, explicitly started Alameda on earn to give principles, used EA social connections to do Alameda’s first major trades (the yen-denominated BTC arbitrage), and gave a ton of money to EA causes. If he isn’t an effective altruist, no one is!
Yeah, that’s why I think ben.smith’s comment in the same thread here is important. Handling the fallout well requires nuance and some additional degree of self-reflection on the part of EA leaders. (I say “some additional degree” because it’s not like people were completely unaware of these risks – see here.) And I think it would be wrong (and too easy) to see Sam as some kind of cartoon villain. It strongly looks as though some actions were far away from “defensible” but I don’t for a second doubt that his motivation to do good was sincere, and he got impressively far with it and you can understand how he might have felt increasingly more empowered to act in naive-consequentialist ways after seeing all that success.
(Edit: To be clear, “understand” isn’t the same as condone; with enough effort you can maybe also “understand” why the Taliban flew a plane into a building, etc.)
It is important to wait and see what happened in more light. We must not have EA used as a defense of criminal activities, if anything illegal did take place. I don’t mean to throw anyone under the bus here, and I don’t really think I mean ‘disassociate SBF from EA’, I mean we should avoid EA becoming associated with Crypto failures because frankly I believe this will be the first introduction many people have to EA.
Let’s try avoid this trending meme on Twitter becoming the general conception of EA
But EA is, almost certainly, an important part of the story here . It would be very strange to pretend that EA and utilitarian philosophy have nothing to do with why SBF took these risks. It’s not exactly some mysterious connection.
It’s not a mysterious connection but EA must not become synonymous with Fraud under the guise of ‘good’. People should not rob banks to send money to CEA.
Edit: This is a random example, I am not saying Sam robbed a bank!
he probably did rob a bank, actually, insofar as I strongly suspect that Silvergate Capital has some loans outstanding to Alameda that they aren’t getting back....
I don’t really think FTT is considered a “major coin”—it’s new, and only used by this one exchange. Not sure it has much any use at all outside FTX and would be kinda weird to overinvest in as an outsider other than as a bet on FTX itself.
People affected aren’t just FTT investors but anyone who used the FTX platform. This is I believe $16B? And, to make matters worse, this money was meant to be held 1:1 but looks like it was loaned out to SBFs trading firm (using FTT) in order to trade. They appear to have minted more FTT in order to make up lost funds (possibly in Q2 when other firms went down). This thread explains a pretty plausible version of events:
sure, I was mostly just disagreeing with “90% loss of a major coin”—but I suppose you can read that sentence more charitably. But focusing on the inherent value of FTT as the avenue of affecting customers I think is misguided.
I think there’s a few serious questions here.
Morally, if it’s found that FTX funded EA through fraudulent activity, is there an imperative to do anything about this? Return funds, support those impacted, etc… Suicide due to a lack of funds is not unprecedented in the crypto space and a ~90% loss of a leading coin may sadly result in loss of life.
How does this impact current EA initiatives relying on FTX-based funding? Is there an urgent need to find other sources of funds to cover important work here?
Is there a need to disassociate EA with FTX because of SBF (he was a director of CEA, spoken about it, and there are other links recently made public such as Will MacAskill’s texts to Elon Musk introducing SBF to be involved in the Twitter deal).
There’s a huge negative sentiment towards SBF ‘playing a white knight’ that I’ve seen on FB/Reddit/HackerNews is leading people to assume EA itself may be fraudulent. Maybe it’s water under the bridge within a week? But maybe it impacts future philanthropy and impacted EA groups losing funding lose trust.
I think when doing any sort of dissociating from SBF, there’s two errors in opposite directions I would like to see EA avoid:
any responsibility on the part of EA should be very clearly acknowledged. I don’t want to get into what sort of responsibility there might be, and I think your questions are a good start. But there’s a tendency for corporate PR to want to airbrush responsibility and the movement’s long term reputation will win if EA conducts itself with integrity.
for integrity’s sake, too, I hope we avoid throwing Sam or anyone else under the bus before the facts are clearly demonstrated. I think you can distance without blaming, and in early stages, that might be the most appropriate action.
I want to acknowledge the challenging time leaders in the space right now must be having. Easy for me to write a list of demands here on a thread, but doubtless more difficult to make the calls. Thoughts are with folks having to make big calls on this right now.
Yes, I agree. I don’t mean to throw Sam under the bus here. I’m sure his intentions were from a good place. I do mean that this is probably going to become the first time many people hear about EA and that should be handled in some way. If EA becomes synonymous with Crypto fraud then we could see less support from existing people and it is first thing people see when they’re looking into EA (GWWC, EA Funds, etc).
Underlying #1 and #3, there’s the additional question of to what extent EA was motivation for SBF to engage in unethical behaviour.
Sequoia, one of the major investors in FTX, paid a writer to do a lengthy puff piece on SBF in September. EA makes numerous appearances:
https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/
EA will be subject to intense scrutiny if SBF viewed reckless and fraudulent behaviour as execution risk for altruistic goals.
I think there’s two possible next steps:
Be vigilant of what money is being donated to EA—if it comes from grey area fields (and I say this as someone who’s worked in crypto for a few years, albeit I quit the area earlier in the year). Of course this being EA there’s going to be people arguing the money has been moved to more positive uses, but public image is key to have sustainable donations moving on.
Have a piece about the pros of EA and thank SBF/FTX for their donations but be clear that EA doesn’t knowingly accept money obtained in potentially immoral ways. Now there’s a chance this was all above board and FTX got beaten by a competitor in an unregulated sector, which is of course possible! However there’s a lot of contradictory points popping up about 1:1 backing and the trading firm was very close to an exchange… market information to front run I get, but hopefully they didn’t loan users funds via FTT to trade.
Tangential to #2, there’s a scenario where this ends up as a reputational nightmare for EA.
If SBF committed fraud, there’s a distinct possibility that SBF will use altruism as a defence and/or justification for his actions in the coming months.
If the above happens, the issue may not die anytime soon. Given the scope of the event, and Sam’s prominence within EA, it would become a borderline obligation for any media outlet to mention it in any coverage of EA for years to come.
Depending on how things break, anyone with a public association with EA may be viewed through the lens of either “dangerously overcommitted to utilitarianism,” or “using EA as a cover for unethical behaviour.”
The author that Sequoia paid to write SBF’s puff piece (linked in earlier comment) has already put out a tweet to this effect:
https://twitter.com/AdamcFisher/status/1590466104773992448
My concern at this point is the willingness of MacAskill and other prominent EA’s to condemn SBF. “Wait and see” is often preferred, but there may be permanent damage to EA’s reputation if SBF is not disavowed by EA leadership in due time.
Sadly, I think his having been the second largest donor to the Biden 2020 campaign fund will be a more effective defence. It certainly worked for the people who lost hundreds of billions of Other People’s Money in 2008.
seems he has ended up giving more to the democratic party than ea lol
Sequoia pulled that link, here’s an archived version.
I don’t think that EA’s reputation will be tainted that much by this incident.
First, startups are inherently risky; the purpose of a startup is to try out an unproven business model in the hope of making money or providing value for customers. FTX exposed investors to what many observers, including me, consider an unacceptable level of risk, but so did Theranos (which was an outright scam).
Second, risk neutrality as a consequence of utilitarianism is not well understood outside the EA community. It might become more prominent in the discourse soon, but right now journalists are mostly not talking about it.
How exactly do you disassociate SBF from EA? The guy grew up with two utilitarian philosopher parents, explicitly started Alameda on earn to give principles, used EA social connections to do Alameda’s first major trades (the yen-denominated BTC arbitrage), and gave a ton of money to EA causes. If he isn’t an effective altruist, no one is!
Yeah, that’s why I think ben.smith’s comment in the same thread here is important. Handling the fallout well requires nuance and some additional degree of self-reflection on the part of EA leaders. (I say “some additional degree” because it’s not like people were completely unaware of these risks – see here.) And I think it would be wrong (and too easy) to see Sam as some kind of cartoon villain. It strongly looks as though some actions were far away from “defensible” but I don’t for a second doubt that his motivation to do good was sincere, and he got impressively far with it and you can understand how he might have felt increasingly more empowered to act in naive-consequentialist ways after seeing all that success.
(Edit: To be clear, “understand” isn’t the same as condone; with enough effort you can maybe also “understand” why the Taliban flew a plane into a building, etc.)
It is important to wait and see what happened in more light. We must not have EA used as a defense of criminal activities, if anything illegal did take place. I don’t mean to throw anyone under the bus here, and I don’t really think I mean ‘disassociate SBF from EA’, I mean we should avoid EA becoming associated with Crypto failures because frankly I believe this will be the first introduction many people have to EA.
Let’s try avoid this trending meme on Twitter becoming the general conception of EA
https://imgur.com/a/7tYOa7M
And, maybe, this is all water under the bridge in a week and it just goes away.
But EA is, almost certainly, an important part of the story here . It would be very strange to pretend that EA and utilitarian philosophy have nothing to do with why SBF took these risks. It’s not exactly some mysterious connection.
It’s not a mysterious connection but EA must not become synonymous with Fraud under the guise of ‘good’. People should not rob banks to send money to CEA.
Edit: This is a random example, I am not saying Sam robbed a bank!
he probably did rob a bank, actually, insofar as I strongly suspect that Silvergate Capital has some loans outstanding to Alameda that they aren’t getting back....
I don’t really think FTT is considered a “major coin”—it’s new, and only used by this one exchange. Not sure it has much any use at all outside FTX and would be kinda weird to overinvest in as an outsider other than as a bet on FTX itself.
People affected aren’t just FTT investors but anyone who used the FTX platform. This is I believe $16B? And, to make matters worse, this money was meant to be held 1:1 but looks like it was loaned out to SBFs trading firm (using FTT) in order to trade. They appear to have minted more FTT in order to make up lost funds (possibly in Q2 when other firms went down). This thread explains a pretty plausible version of events:
https://twitter.com/LucasNuzzi/status/1590122590206824448?t=ZMpzX12eJCqMhXxJgrdLiA
sure, I was mostly just disagreeing with “90% loss of a major coin”—but I suppose you can read that sentence more charitably. But focusing on the inherent value of FTT as the avenue of affecting customers I think is misguided.