That being said, only slightly updating towards him using EA ideology as his main motivator to commit fraud, as that still may very well not be the case.
For the record, I did not believe this to be the case (and had extensively argued as so on Twitter). Even a naive utilitarian calculus doesn’t justify risking the funds of over a million customers, the FTX Future fund, the reputation and public goodwill of the EA community, and the entirety of FTX itself to try and bail out Alameda (if that is indeed what happened).
That said, an EA in crypto I trust has told me that if Alameda went under, FTX would have gone down with it, and so it may have been a case of “lose literally everything” or gamble customer funds to try and save Alameda (and by extension FTX).
If Alameda’s bad bets was going to drag FTX under if SBF let it fail, then it’s possible that the trade was:
Lose Alameda Research, FTX (and its customer funds), the FTX Future Foundation and all future donations
Gamble customer funds to try and save all the above (if you win) vs lose them and the reputation and public goodwill of the Effective Altruism community if you lose
Then the utilitarian calculus is very different. I’m not trying to argue that SBF committed fraud due to EA ideology, but it’s no longer as implausible as it seemed to me in the first place.
At least it may not be the case that SBF had the option to just let Alameda go under and keep FTX/its customer funds. It’s not clear that the funds of over a million customers would have been preserved even if FTX did not gamble them.
(The above argument is speculative and based on second hand explanations of crypto dynamics I don’t understand very well; it may be completely wrong.)
I don’t see how losing Alamada could have lost the depositor funds, at least if there had been no gambling with depositor funds to that point. I can see, however, how it could crash the FTT token, and that could bring down FTX as a business. But the deposits should have been safe, and the ones not denominated in FTT should have held value. So I don’t think the “nothing to lose” scenario is likely.
Fwiw, I don’t think a crash in the FTT token would’ve crashed FTX as a business (assuming no funny business with extending loans to other parties collateralized in FTT). Afaik FTT was basically a revenue-share token, essentially like common stock.
Just as Meta shares falling 70% didn’t affect their core business of showing users ads, a crash in FTT shouldn’t have affected the core exchange business. It’s just the going rate for rights to future profits.
For the record, I did not believe this to be the case (and had extensively argued as so on Twitter). Even a naive utilitarian calculus doesn’t justify risking the funds of over a million customers, the FTX Future fund, the reputation and public goodwill of the EA community, and the entirety of FTX itself to try and bail out Alameda (if that is indeed what happened).
That said, an EA in crypto I trust has told me that if Alameda went under, FTX would have gone down with it, and so it may have been a case of “lose literally everything” or gamble customer funds to try and save Alameda (and by extension FTX).
If Alameda’s bad bets was going to drag FTX under if SBF let it fail, then it’s possible that the trade was:
Lose Alameda Research, FTX (and its customer funds), the FTX Future Foundation and all future donations
Gamble customer funds to try and save all the above (if you win) vs lose them and the reputation and public goodwill of the Effective Altruism community if you lose
Then the utilitarian calculus is very different. I’m not trying to argue that SBF committed fraud due to EA ideology, but it’s no longer as implausible as it seemed to me in the first place.
At least it may not be the case that SBF had the option to just let Alameda go under and keep FTX/its customer funds. It’s not clear that the funds of over a million customers would have been preserved even if FTX did not gamble them.
(The above argument is speculative and based on second hand explanations of crypto dynamics I don’t understand very well; it may be completely wrong.)
I don’t see how losing Alamada could have lost the depositor funds, at least if there had been no gambling with depositor funds to that point. I can see, however, how it could crash the FTT token, and that could bring down FTX as a business. But the deposits should have been safe, and the ones not denominated in FTT should have held value. So I don’t think the “nothing to lose” scenario is likely.
Fwiw, I don’t think a crash in the FTT token would’ve crashed FTX as a business (assuming no funny business with extending loans to other parties collateralized in FTT). Afaik FTT was basically a revenue-share token, essentially like common stock.
Just as Meta shares falling 70% didn’t affect their core business of showing users ads, a crash in FTT shouldn’t have affected the core exchange business. It’s just the going rate for rights to future profits.