I think that what FTX is accused of this comment is legitimately way more something where a charitable recipient is not morally obliged to demand this level of careful checking of everything, because our civilization is just not actually able to support this level of competency pornography.
Stealing your customers’ funds is a very different matter from “some of the people who use our services are criminals”. Why, MIRI has in the past accepted matching funds from Google, which I’m sure profits a whole lot off criminals using their services! And some of those criminals may even be bad people!
But you can’t, actually, run a post-agricultural civilization on the principle of everybody who engages in every transaction checking out the full moral character of everybody who transacts with them. If you did try to build clever infrastructure for that, its first use on the margin would be by the right to hunt down sex workers (as already occurs with Visa) and by the left to hunt down people who said bad things on Twitter.
In a hunter-gatherer tribe it maybe makes sense to demand that people not transact with that bad guy over there; it scales as far as it needs to scale. And MIRI would not take money from somebody what we knew had stolen in charity’s name. But to figure it all out—if you want to read about Civilizations that have the basic infrastructure and competence to run those kind of traces, go read science fiction; here on Earth you’ve got VC firms trying to run six months of due diligence and then they invest in FTX.
IMO the amount of diligence someone ought to perform on their counterparties’ character is different in different circumstances. “This person is one of hundreds of people I transact with every week” carries different obligations than “This person is one of the four big donors who fund my organization” carries different obligations than “This person has been my only source of income for the past two years”. Different EAs were at different points along this spectrum.
I think that what FTX is accused of this comment is legitimately way more something where a charitable recipient is not morally obliged to demand this level of careful checking of everything, because our civilization is just not actually able to support this level of competency pornography.
Stealing your customers’ funds is a very different matter from “some of the people who use our services are criminals”. Why, MIRI has in the past accepted matching funds from Google, which I’m sure profits a whole lot off criminals using their services! And some of those criminals may even be bad people!
But you can’t, actually, run a post-agricultural civilization on the principle of everybody who engages in every transaction checking out the full moral character of everybody who transacts with them. If you did try to build clever infrastructure for that, its first use on the margin would be by the right to hunt down sex workers (as already occurs with Visa) and by the left to hunt down people who said bad things on Twitter.
In a hunter-gatherer tribe it maybe makes sense to demand that people not transact with that bad guy over there; it scales as far as it needs to scale. And MIRI would not take money from somebody what we knew had stolen in charity’s name. But to figure it all out—if you want to read about Civilizations that have the basic infrastructure and competence to run those kind of traces, go read science fiction; here on Earth you’ve got VC firms trying to run six months of due diligence and then they invest in FTX.
IMO the amount of diligence someone ought to perform on their counterparties’ character is different in different circumstances. “This person is one of hundreds of people I transact with every week” carries different obligations than “This person is one of the four big donors who fund my organization” carries different obligations than “This person has been my only source of income for the past two years”. Different EAs were at different points along this spectrum.
I generally agree with you, but in this case SBF
1) hired a high-level person with a long history of fraud (you don’t see Asana or Stripe doing this); and
2) described his own business as a Ponzi scheme (see https://www.bloomberg.com/news/articles/2022-04-25/sam-bankman-fried-described-yield-farming-and-left-matt-levine-stunned ).
It was obvious that he was up to no good.
“But Sequoia”—I’m not convinced that they did any due diligence, judging by what they published on their own website: https://twitter.com/zebulgar/status/1590394857474109441 It’s not the only occasion when it looks to me like “top” VC firms leapt into investments out of FOMO, with zero effort at due diligence: https://medium.com/swlh/why-are-investors-eager-to-lose-money-on-health-tech-f8c678ccc417