None of the early Alameda employees who witnessed Bankman-Fried’s behavior years earlier say they anticipated this level of alleged criminal fraud. There was no “smoking gun,” as one put it, that revealed specific examples of lawbreaking. Even if they knew Bankman-Fried was dishonest and unethical, they say, none of them could have foreseen a fraud of this scope.
If even they didn’t think this, I don’t think we should be surprised that core EAs didn’t either.
While I agree with a strict reading of this comment, I want to point out that there was another red flag around FTX/Alameda that several people in the EA leadership likely knew about since at least late 2021, which in my opinion was more severe than the matters discussed in the Time article and which convinced me back in 2021 that FTX/Alameda were putting a lot of effort into consistently lying to the public.
In particular, in October 2021, I witnessed (sentence spread across bullet points to give emphasis to each part of it):
A high-status, important EA (though not one of the very top people)
who had worked at Alameda after FTX was founded, and left before October 2021
publicly offhandedly implying that “FTX” was the new name for Alameda (seemingly unaware that they were supposed to be distinct companies)
in a place where another very high-status EA (this time probably one of the very top people, or close to it) clearly took note of it
I won’t give more details publicly, in order to protect the person’s privacy, but this happened in a very public place.
It wasn’t just me who was aware of this. Nate Soares reported having heard the rumor that “Alameda Research had changed its name to FTX” as well, though I think he left out one important aspect of it: that this rumor was being shared by formerinsiders, not by e.g. random clueless crypto people.
In case you don’t understand why the rumor was a big deal, I explained it in my comment in Nate Soares’s post. Quoting from it:
Everywhere on the public internet, Alameda Research and FTX had painted themselves as clearly different companies. Since October 2021, they’ve ostensibly had disjoint sets of CEOs. By late 2021 I had watched several interviews with SBF and followed his output closely on Twitter, and saw people talking about Alameda and FTX in several crypto Discord servers. Nowhere did anyone say that Alameda had changed its name to FTX or otherwise act as if they were the same company (though everyone knew they were close).
[...]
How could [the former Alameda employee] know less about FTX and Alameda than me, who had never worked at either company and was just watching everything by the sidelines? If it was possible for this person to think that FTX was merely the new name for Alameda, that almost certainly implied that the FTX/Alameda leadership was putting a lot of effort into consistently lying to the public.
I suspect you will not be very impressed by this, and ask me why I didn’t share my concerns widely at the time. But I was just a low-status person with no public platform and only one or two friends. I shared my concerns with my partner (in fact, more than once, because I was so puzzled by that comment) but not with people I’m not close to. [ETA: in retrospect, I think a more correct explanation would be to say that I probably stayed silent because I guessed I’d lose status if I’d spoken up. 🙁]
I’m not sure why this wasn’t taken seriously by the EA leadership. This seems to be a pretty clear example of the FTX/Alameda leadership blatantly lying to the public about their internal workings and prominent EAs knowing about that.
I of course knew that FTX and Alameda were very closely related, that Sam and Caroline were dating and that the two organizations had very porous boundaries. But I did not know that the rest of the world did not know this, and I had no idea that it mattered much legally. They were both located in the Bahamas, and I definitely did not know enough finance law to know that these two organizations were supposed to operate at arms length.
Maybe there was someone else who did successfully put the pieces together and then stayed quiet, but I would definitely not treat this as a “smoking gun” since I saw it myself, as did many people I know, and neither me nor other people realized that this was actually pretty shady.
And legally there were actually distinct companies, at least the same way GiveWell and OpenPhil were different companies back in 2018 when they still worked in the same office and shared some leadership, and that itself doesn’t raise any flags for me. FTX and Alameda definitely actually were different companies with some offices being just for Alameda (like the one in Berkeley), though they definitely did not operate “at arms length” as I think the legal situation required.
While I agree with a strict reading of this comment, I want to point out that there was another red flag around FTX/Alameda that several people in the EA leadership likely knew about since at least late 2021, which in my opinion was more severe than the matters discussed in the Time article and which convinced me back in 2021 that FTX/Alameda were putting a lot of effort into consistently lying to the public.
In particular, in October 2021, I witnessed (sentence spread across bullet points to give emphasis to each part of it):
A high-status, important EA (though not one of the very top people)
who had worked at Alameda after FTX was founded, and left before October 2021
publicly offhandedly implying that “FTX” was the new name for Alameda (seemingly unaware that they were supposed to be distinct companies)
in a place where another very high-status EA (this time probably one of the very top people, or close to it) clearly took note of it
I won’t give more details publicly, in order to protect the person’s privacy, but this happened in a very public place.
It wasn’t just me who was aware of this. Nate Soares reported having heard the rumor that “Alameda Research had changed its name to FTX” as well, though I think he left out one important aspect of it: that this rumor was being shared by former insiders, not by e.g. random clueless crypto people.
In case you don’t understand why the rumor was a big deal, I explained it in my comment in Nate Soares’s post. Quoting from it:
I suspect you will not be very impressed by this, and ask me why I didn’t share my concerns widely at the time. But I was just a low-status person with no public platform and only one or two friends. I shared my concerns with my partner (in fact, more than once, because I was so puzzled by that comment) but not with people I’m not close to. [ETA: in retrospect, I think a more correct explanation would be to say that I probably stayed silent because I guessed I’d lose status if I’d spoken up. 🙁]
I’m not sure why this wasn’t taken seriously by the EA leadership. This seems to be a pretty clear example of the FTX/Alameda leadership blatantly lying to the public about their internal workings and prominent EAs knowing about that.
I of course knew that FTX and Alameda were very closely related, that Sam and Caroline were dating and that the two organizations had very porous boundaries. But I did not know that the rest of the world did not know this, and I had no idea that it mattered much legally. They were both located in the Bahamas, and I definitely did not know enough finance law to know that these two organizations were supposed to operate at arms length.
Maybe there was someone else who did successfully put the pieces together and then stayed quiet, but I would definitely not treat this as a “smoking gun” since I saw it myself, as did many people I know, and neither me nor other people realized that this was actually pretty shady.
And legally there were actually distinct companies, at least the same way GiveWell and OpenPhil were different companies back in 2018 when they still worked in the same office and shared some leadership, and that itself doesn’t raise any flags for me. FTX and Alameda definitely actually were different companies with some offices being just for Alameda (like the one in Berkeley), though they definitely did not operate “at arms length” as I think the legal situation required.