Minor object-level objection: you say we should predict that crypto exchanges like FTX to fail, but I tried to calculate the risk of this in the second part of my post, and the average FTX-sized exchange fails only very rarely.
I don’t think this is our main point of disagreement though. My main point of disagreement is about how actionable this is and what real effects it can have.
I think that the main way EA is “affiliated with” crypto is that it has accepted successful crypto investors’ money. Of people who have donated the most to EA, I think about 5-7 of the top ten names made their money in something crypto-related (even counting all the FTX people as one donor). Some of those people (example: Vitalik Buterin) are well-liked, honest, and haven’t done anything to embarrass us. I think it would be practically bad to stop accepting their people, and morally bad (as a betrayal) to denounce them and writing them out of the movement based on guilt by association. (CoI note: I have benefited from non-FTX crypto money)
I see you’re not recommending that EA stop taking crypto money. But then I’m not sure what you do want, other than what’s already happening:
You recommend EA not invest in crypto, but I don’t think the movement is really doing this, and if they are I would expect that to be for normal economic reasons like diversification (and in general I expect Open Phil’s investment managers to know more than us) .
You recommend that organizations not put crypto people on their board, but I don’t know of this happening except when those people have already been EAs before getting into crypto (I think SBF was on CEA’s board before he got into crypto, although I could be wrong). If it was happening in other cases, I would assume it was because of standard practices around very big donors getting on the board, and not because EAs love crypto so much that they invite random crypto leaders to join company boards. If you know of examples to the contrary I would be interested in hearing them.
You recommend not boasting about ties to crypto insiders. I haven’t seen this happen except with SBF, where I think the boasting was along the lines of “look how well this person earning to give paid off”. I agree that people should do less of that in the future.
Although the point of “don’t invite random crypto scammers to serve on your board and become the public face of EA for no reason” is obviously correct, I don’t know of anyone actually doing this, and so I worry that the real effect of posts like this will be to slowly make crypto so toxic in this community that EA leaders feel pressured to refuse crypto donations for PR reasons, and then we lose > half of our potential money. I’m especially worried about some kind of purity spiral, where after crypto is toxified, the next level is people arguing that Facebook has also been a pretty evil company at various points and so maybe we shouldn’t accept Dustin’s money either. I don’t see a good Schelling fence here and would prefer not to start down that slope. I think we should avoid associating with (including taking money from) anyone who seems likely to be an outright fraud or breaking the law, and maybe some extremely harmful industries like tobacco, but not try to more generally be the arbiters of which industries are vs. aren’t socially productive.
I see more possible action points from the original post, mostly having to do with brand risk management and risk containment. I think it’s hard to deny that the crypto sector has much higher-than-average risk of causing reputational damage, and that EA just got a concussion from crypto. So, it is at particular risk of something akin to second concussion syndrome (SCS) if there’s another crypto concussion before this one heals.
So my additional possble action points based on the original post:
There are advantages of splitting one’s social movement into different brands. Corporations know this—Marriott owns Ritz Carlton and a bunch of other hotel brands, but it doesn’t splash the Ritz Carlton brand over all its stuff. If you’re right that crypto is a large portion of available funding, maybe people should be steered toward the “Crypto for Human Flourishing” movement with its own meta organizations and public figures, which could use EA organizations as vendors (e.g., commissioning research from RP, GiveWell, etc.) There needs to be a brand that non-crypto billionaires have a good opinion of and are proud to be associated with—and having the big-money crypto folks at the party probably isn’t conducive to that (at least in the medium run).
Likewise, maybe EA meta orgs should avoid taking crypto money altogether. Instead, solid donors like OP could funge the crypto donor’s non-donation to meta causes and create the correct funding balance. For various reasons, I think EA meta taking bad crypto $$$ has a much higher reputational risk than (e.g.) AMF or GiveDirectly doing so. To outsiders, meta can come across as smug, self-indulgent, arrogant, and morally superior—I am not endorsing those views, but it’s just a lot harder for other people to stay mad at an organization that just delivers bednets or cash transfers to people in Africa.
I have generally been skeptical of donor vetting/investigation, but one could argue that the increased risk of the crypto sector + the current risk of SCS warrants much heavier scrutiny by an independent “EA Inspector General” in advance of accepting major crypto-linked funding. At a minimum, if (when) there is another incident, EA could show that it did as much as it could to vet. As opposed to the current situation, where the public reporting gives the impression that EA leaders ignored clear warning signs brought to their attention.
Finally, the original post supports a need for special mitigation measures for crypto donations. At least given the risk of SCS: on Day 1 of the next EA-linked crypto scandal, the message that “if it turns out this source’s money was rotten, we will voluntarily return every penny from the last six years (or whatever) to the victims” must be very clearly conveyed (and pre-prepared). By the time the fraud is clear, the returns need to start happening the same week (they could be transferred to a temporary organization if the bankruptcy estate isn’t ready to receive them yet). That may require that crypto money needs to be kept in Treasuries for a while, or spent on capital assets that could be sold (like manor houses...), or that a big-money source agrees to “insure” smaller organizations against crypto-fraud risk for approved donors ex ante. It might even be possible to buy partial insurance coverage on the market, although that is speculation on my part.
You recommend not boasting about ties to crypto insiders. I haven’t seen this happen except with SBF, where I think the boasting was along the lines of “look how well this person earning to give paid off”. I agree that people should do less of that in the future.
Might I introduce you to the post announcing an EA funds spinoff website called “effectivecrypto.org″, where the authors openly state:
There is already a fair amount of overlap between the crypto community and EA (cf. Sam Bankman-Fried/FTX, Lantern Ventures, etc.
The website has since been deleted, but if you look at the archived version, you can see a big splash banner of SBF himself endorsing the project. In the “learn more” page, you then see another big post tying crypto to EA:
Effective Crypto is a project of Effective Altruism Funds, a donation platform for maximising the impact of your donations. Since 2017, Effective Altruism Funds has moved nearly $80 million (including over $17 million worth of crypto) to organizations and researchers working on the world’s most pressing problems. Meet the EA Funds team.
They then uncritically repeat speculation that bitcoin will hit $200k (whoops). At no point in the website, or in the announcement post, did anybody mention that crypto was in the middle of a massive speculative bubble due to crash any minute.
(edit:)Theres also a direct quote from the Q&A section:
Institutional experience – we’ve been accepting crypto donations since 2017, and have strong ties to the crypto community.
So I think that settles that point.
EA and SBF were undeniably affiliated. The ties between CEA leadership and SBF have been documented extensively, and used to beat the movement over the head with in pretty much every major newspaper of note. I mean, just look at the FTX foundation website, with the effective altruism logo prominently featured as “grantee and partners”.
I mean, I guess my main point of note is: Don’t do it again? I’m sure there will be a period of caution for the next while, but if another crypto bubble forms, I expect there will be a temptation to exploit the speculative mania by affiliating with another crypto firm, with predictable results.
The other main point is: Stop pretending crypto isn’t in a speculative bubble. It is, and will remain so until an actual use-case exists that generates revenue commensurate with the ridiculous market cap. (or if the field collapses enough to be sustainable by the few niche applications that do exist).
If EA sacrifices it’s reputation to chase after unregulated crypto money, theres a very good chance it will be left with nothing, if, as I suspect, crypto eventually fizzles out completely, and ends up just a niche hobby thing. Whereas a reputation for responsibility and caution will actually pay off long term. And even if they do find the mysterious crypto application that makes it a genuine hit, you can always get involved with it then. You’re not missing out on all the future crypto money, all you’re missing out on is the current speculative mania.
Minor object-level objection: you say we should predict that crypto exchanges like FTX to fail, but I tried to calculate the risk of this in the second part of my post, and the average FTX-sized exchange fails only very rarely.
I don’t think this is our main point of disagreement though. My main point of disagreement is about how actionable this is and what real effects it can have.
I think that the main way EA is “affiliated with” crypto is that it has accepted successful crypto investors’ money. Of people who have donated the most to EA, I think about 5-7 of the top ten names made their money in something crypto-related (even counting all the FTX people as one donor). Some of those people (example: Vitalik Buterin) are well-liked, honest, and haven’t done anything to embarrass us. I think it would be practically bad to stop accepting their people, and morally bad (as a betrayal) to denounce them and writing them out of the movement based on guilt by association. (CoI note: I have benefited from non-FTX crypto money)
I see you’re not recommending that EA stop taking crypto money. But then I’m not sure what you do want, other than what’s already happening:
You recommend EA not invest in crypto, but I don’t think the movement is really doing this, and if they are I would expect that to be for normal economic reasons like diversification (and in general I expect Open Phil’s investment managers to know more than us) .
You recommend that organizations not put crypto people on their board, but I don’t know of this happening except when those people have already been EAs before getting into crypto (I think SBF was on CEA’s board before he got into crypto, although I could be wrong). If it was happening in other cases, I would assume it was because of standard practices around very big donors getting on the board, and not because EAs love crypto so much that they invite random crypto leaders to join company boards. If you know of examples to the contrary I would be interested in hearing them.
You recommend not boasting about ties to crypto insiders. I haven’t seen this happen except with SBF, where I think the boasting was along the lines of “look how well this person earning to give paid off”. I agree that people should do less of that in the future.
Although the point of “don’t invite random crypto scammers to serve on your board and become the public face of EA for no reason” is obviously correct, I don’t know of anyone actually doing this, and so I worry that the real effect of posts like this will be to slowly make crypto so toxic in this community that EA leaders feel pressured to refuse crypto donations for PR reasons, and then we lose > half of our potential money. I’m especially worried about some kind of purity spiral, where after crypto is toxified, the next level is people arguing that Facebook has also been a pretty evil company at various points and so maybe we shouldn’t accept Dustin’s money either. I don’t see a good Schelling fence here and would prefer not to start down that slope. I think we should avoid associating with (including taking money from) anyone who seems likely to be an outright fraud or breaking the law, and maybe some extremely harmful industries like tobacco, but not try to more generally be the arbiters of which industries are vs. aren’t socially productive.
I see more possible action points from the original post, mostly having to do with brand risk management and risk containment. I think it’s hard to deny that the crypto sector has much higher-than-average risk of causing reputational damage, and that EA just got a concussion from crypto. So, it is at particular risk of something akin to second concussion syndrome (SCS) if there’s another crypto concussion before this one heals.
So my additional possble action points based on the original post:
There are advantages of splitting one’s social movement into different brands. Corporations know this—Marriott owns Ritz Carlton and a bunch of other hotel brands, but it doesn’t splash the Ritz Carlton brand over all its stuff. If you’re right that crypto is a large portion of available funding, maybe people should be steered toward the “Crypto for Human Flourishing” movement with its own meta organizations and public figures, which could use EA organizations as vendors (e.g., commissioning research from RP, GiveWell, etc.) There needs to be a brand that non-crypto billionaires have a good opinion of and are proud to be associated with—and having the big-money crypto folks at the party probably isn’t conducive to that (at least in the medium run).
Likewise, maybe EA meta orgs should avoid taking crypto money altogether. Instead, solid donors like OP could funge the crypto donor’s non-donation to meta causes and create the correct funding balance. For various reasons, I think EA meta taking bad crypto $$$ has a much higher reputational risk than (e.g.) AMF or GiveDirectly doing so. To outsiders, meta can come across as smug, self-indulgent, arrogant, and morally superior—I am not endorsing those views, but it’s just a lot harder for other people to stay mad at an organization that just delivers bednets or cash transfers to people in Africa.
I have generally been skeptical of donor vetting/investigation, but one could argue that the increased risk of the crypto sector + the current risk of SCS warrants much heavier scrutiny by an independent “EA Inspector General” in advance of accepting major crypto-linked funding. At a minimum, if (when) there is another incident, EA could show that it did as much as it could to vet. As opposed to the current situation, where the public reporting gives the impression that EA leaders ignored clear warning signs brought to their attention.
Finally, the original post supports a need for special mitigation measures for crypto donations. At least given the risk of SCS: on Day 1 of the next EA-linked crypto scandal, the message that “if it turns out this source’s money was rotten, we will voluntarily return every penny from the last six years (or whatever) to the victims” must be very clearly conveyed (and pre-prepared). By the time the fraud is clear, the returns need to start happening the same week (they could be transferred to a temporary organization if the bankruptcy estate isn’t ready to receive them yet). That may require that crypto money needs to be kept in Treasuries for a while, or spent on capital assets that could be sold (like manor houses...), or that a big-money source agrees to “insure” smaller organizations against crypto-fraud risk for approved donors ex ante. It might even be possible to buy partial insurance coverage on the market, although that is speculation on my part.
Might I introduce you to the post announcing an EA funds spinoff website called “effectivecrypto.org″, where the authors openly state:
The website has since been deleted, but if you look at the archived version, you can see a big splash banner of SBF himself endorsing the project. In the “learn more” page, you then see another big post tying crypto to EA:
They then uncritically repeat speculation that bitcoin will hit $200k (whoops). At no point in the website, or in the announcement post, did anybody mention that crypto was in the middle of a massive speculative bubble due to crash any minute.
(edit:)Theres also a direct quote from the Q&A section:
So I think that settles that point.
EA and SBF were undeniably affiliated. The ties between CEA leadership and SBF have been documented extensively, and used to beat the movement over the head with in pretty much every major newspaper of note. I mean, just look at the FTX foundation website, with the effective altruism logo prominently featured as “grantee and partners”.
I mean, I guess my main point of note is: Don’t do it again? I’m sure there will be a period of caution for the next while, but if another crypto bubble forms, I expect there will be a temptation to exploit the speculative mania by affiliating with another crypto firm, with predictable results.
The other main point is: Stop pretending crypto isn’t in a speculative bubble. It is, and will remain so until an actual use-case exists that generates revenue commensurate with the ridiculous market cap. (or if the field collapses enough to be sustainable by the few niche applications that do exist).
If EA sacrifices it’s reputation to chase after unregulated crypto money, theres a very good chance it will be left with nothing, if, as I suspect, crypto eventually fizzles out completely, and ends up just a niche hobby thing. Whereas a reputation for responsibility and caution will actually pay off long term. And even if they do find the mysterious crypto application that makes it a genuine hit, you can always get involved with it then. You’re not missing out on all the future crypto money, all you’re missing out on is the current speculative mania.