Strikes me as…premature? We’ll have a lot more clarity in the coming days, and resigning + questioning the ethics at FTX when we still fundamentally don’t know what happened doesn’t seem particularly productive.
If FTX just took risks and lost, this will look very dumb in hindsight. And if there turn out to be lots of unethical calls, we’ll have more than enough time to criticize them all to our hearts’ content. But at least we’ll have the facts.
Looking dumb is an acceptable risk. If the team prematurely resigned and there is still usable money . . . the usable money is presumably locked in the FTX Foundation and in DAFs, it is not lost.
Premature send, ETA: As far as “questioning the ethics at FTX,” it would be very easy for FTX to have denied raiding customer funds if they didn’t do it as reported. It’s appropriate to draw the obvious inference that they did, and that alone is more than enough to “question[] the ethics at FTX” which is a pretty mild response to the news in my book.
The PR attention is at its height this week, the risk of “looking dumb” (which I think is very unlikely) is outweighed by the need to engage in damage control. No one will be listening if EA waits a few weeks to start distancing itself....
From The Snowball, dealing with Warren Buffett’s son’s stint as a director and PR person for ADM:
The second the FBI agents left, Howie called his father, flailing, saying, I don’t know what to do, I don’t have the facts, how do I know if these allegations are true? My name is on every press release. How can I be the spokesman for the company worldwide? What should I do, should I resign?
Buffett refrained from the obvious response, which was that, of his three children, only Howie could have wound up with an FBI agent in his living room after taking his first job in the corporate world. He listened to the story non-judgmentally and told Howie that it was his decision whether to stay at ADM. He gave only one piece of advice: Howie had to decide within the next twenty-four hours. If you stay in longer than that, he said, you’ll become one of them. No matter what happens, it will be too late to get out.
That clarified things. Howie now realized that waiting was not a way to get more information to help him decide, it was making the decision to stay. He had to look at his options and understand as of right now what they meant.
If he resigned and they were innocent, he would lose friends and look like a jerk.
If he stayed and they were guilty, he would be viewed as consorting with criminals.
The next day Howie went in, resigned, and told the general counsel that he would take legal action against the company if they put his name on any more press releases. Resigning from the board was a major event. For a director to resign was like sending up a smoke signal that said the company was guilty, guilty, guilty. People at ADM did not make it easy for Howie. They pushed for reprieve, they asked how he could in effect convict them without a trial. Howie held firm, however, and got out.
The facts are plenty clear (with respect to the type of criminal activity taking place, if not the specifics or quantum) if you do some digging on twitter. Crypto-forensics have been having a field day and SBF himself has surprisingly been continuing to dig his grave deeper.
I would highly, highly recommend that people just wait up to 72 hours for more information, rather than digging through Twitter or Reddit threads.
Edit: This is not to imply that I have secret information—just that this is unfolding very quickly and I expect to learn a lot more in the coming days.
Why? Coin Desk’s leak—which set off the death spiral—is clear enough. Multiple investors that SBF tried to get bail-out funds from have told the WSJ and FT that SBF admitted to loaning out customer funds to Alameda. Binance pulled out of the deal for a reason. There is plenty of data online about FTX’s movements on the blockchain. And, of course, there’s the obvious fact that SBF is now very publicly looking for $8bn of funding to cover FTX’s liabilities.
Feels like you are implying you have secret info, but it just seems extremely unlikely to me that this was anything other than huge mismanagement of customer funds against their wishes.
What odds are you willing to bet that we will see it differently in 72 hours?
I don’t think the bet suggestions (not just from you—there were a bunch in others’ comments on your own post) are helping make the situation any less tense.
Edit: I also think the interpretation of “implying to have secret information” rather than “trying to de-escalate” is not really grounded, and results in your comment being combative in my eyes.
I think bets with real stakes can be a good de-escalation procedure! It’s easy to fire increasingly heated claims back and forth while there’s no concrete consequences, but when there’s money on the line you have to back off and figure out what you actually believe, and then also once the bet is made there is less incentive to keep arguing while you wait for resolution.
Strikes me as…premature? We’ll have a lot more clarity in the coming days, and resigning + questioning the ethics at FTX when we still fundamentally don’t know what happened doesn’t seem particularly productive.
If FTX just took risks and lost, this will look very dumb in hindsight. And if there turn out to be lots of unethical calls, we’ll have more than enough time to criticize them all to our hearts’ content. But at least we’ll have the facts.
Looking dumb is an acceptable risk. If the team prematurely resigned and there is still usable money . . . the usable money is presumably locked in the FTX Foundation and in DAFs, it is not lost.
Premature send, ETA: As far as “questioning the ethics at FTX,” it would be very easy for FTX to have denied raiding customer funds if they didn’t do it as reported. It’s appropriate to draw the obvious inference that they did, and that alone is more than enough to “question[] the ethics at FTX” which is a pretty mild response to the news in my book.
The PR attention is at its height this week, the risk of “looking dumb” (which I think is very unlikely) is outweighed by the need to engage in damage control. No one will be listening if EA waits a few weeks to start distancing itself....
From The Snowball, dealing with Warren Buffett’s son’s stint as a director and PR person for ADM:
The facts are plenty clear (with respect to the type of criminal activity taking place, if not the specifics or quantum) if you do some digging on twitter. Crypto-forensics have been having a field day and SBF himself has surprisingly been continuing to dig his grave deeper.
I would highly, highly recommend that people just wait up to 72 hours for more information, rather than digging through Twitter or Reddit threads.
Edit: This is not to imply that I have secret information—just that this is unfolding very quickly and I expect to learn a lot more in the coming days.
Why? Coin Desk’s leak—which set off the death spiral—is clear enough. Multiple investors that SBF tried to get bail-out funds from have told the WSJ and FT that SBF admitted to loaning out customer funds to Alameda. Binance pulled out of the deal for a reason. There is plenty of data online about FTX’s movements on the blockchain. And, of course, there’s the obvious fact that SBF is now very publicly looking for $8bn of funding to cover FTX’s liabilities.
Feels like you are implying you have secret info, but it just seems extremely unlikely to me that this was anything other than huge mismanagement of customer funds against their wishes.
What odds are you willing to bet that we will see it differently in 72 hours?
I don’t think the bet suggestions (not just from you—there were a bunch in others’ comments on your own post) are helping make the situation any less tense.
Edit: I also think the interpretation of “implying to have secret information” rather than “trying to de-escalate” is not really grounded, and results in your comment being combative in my eyes.
I think bets with real stakes can be a good de-escalation procedure! It’s easy to fire increasingly heated claims back and forth while there’s no concrete consequences, but when there’s money on the line you have to back off and figure out what you actually believe, and then also once the bet is made there is less incentive to keep arguing while you wait for resolution.
Didn’t mean to imply secret info, edited the comment above.
That said, seeing most of their legal and compliance teams quit gives me much more serious reservations about illegal or unethical behavior.
Edit: I think I retract this second part—I don’t know if everyone’s quitting now that they can’t pay salaries, or just the legal/compliance teams.