I tried to address this argument with the point about every other long-time EA leaving Alameda for the same reasons. I’ve avoided naming those other EAs out of respect for their privacy, but they include multiple very core and well-respected EAs. The parallel you’re trying to draw here just really doesn’t hold up.
nbouscal
Karma: 823
Yes, I disagree. My understanding of what happened at each of those four companies in the early days is qualitatively, categorically different from what happened at Alameda.
One important thing to note is that when we first warned everyone, he was not yet in the richest 100 people in the world. If they had taken our warnings seriously at the start, he may never have become that rich in the first place.
this was not above normal levels for the CEO of a rapidly growing business
It was, and we explicitly said that it was at the time. Many of those of us who left have a ton of experience in startups, and the persistent idea that this was a typical “founder squabble” is wrong, and to be honest, getting really tiresome to hear. This was not a normal startup, and these were not normal startup problems.
(Appreciate the words of support for my honesty, thank you!)
I should maybe have been clearer. When talking to a random journalist you don’t know, I think it’s pretty obvious that you should confirm whether you’re on the record or not. I was more trying to address the concern about whether things are newsworthy when talking to friends who also happen to be journalists. Journalists have beats, and most journalists are not currently working any stories for which comments from random EAs are newsworthy. A few journalists are! And if you happen to be talking to those ones, then, yeah, exercise more caution.
I dunno I think people are just really overestimating the likelihood of getting “caught on the record” as a random EA. It’s hard to explain precisely why, but, if any EA who is totally unconnected to current events ends up with their words being published against their expectations I will be very surprised. Happy to bet against it happening at 4:1 odds (for relatively small amounts as it’s a bit hard to make the criteria ungameable).
I think that’s a pretty fair point but a bit overstated? I don’t think arbitrary EAs have that much to worry about here, I think it’s mainly just people with a more direct connection to the events. That’s certainly not a small group, but I’m not sure it’s a “large fraction of the people writing on this Forum” either. And again, I think we all generally know who we are and know that that implies we should be cautious when talking to journalists.
That said I certainly don’t think it would hurt for everyone writing on this Forum to explicitly confirm that they’re off the record when talking to any journalists for the next few weeks. I don’t see doing so as very costly at all.
I don’t know you personally so I can’t say whether this applies to you specifically, but: the vast majority of people do not say newsworthy things to their friends basically ever. I really don’t think it makes sense to feel anxious about this or change your behaviour based on a (former?) multi-billionaire’s DMs getting published. Almost everyone who is in the reference class of “people who need to worry about this” is aware that they are in that reference class.
It takes about a minute of googling to find an article that reasonably accurately clarifies what is meant by “on the record”, “background”, and “off the record”. The social rule is that when speaking to a journalist about anything remotely newsworthy (if unsure, assume it is), you’re on the record unless you say you’d rather not be and the journalist explicitly agrees.
The rules aren’t self-evident, they’re just well-known among people who need to know them. People are acting like Sam should have known because he has been actively engaging with the press for years now, has consulted with PR professionals, etc. The idea that these rules have not been explained to him clearly and repeatedly is vanishingly unlikely to the point of being laughable.
There’s no reason to be reluctant to talk to journalist friends about non-newsworthy stuff, and the vast majority of things normal people talk to their friends about are not newsworthy. If you want to talk to a journalist friend about something that might be newsworthy, it’s as easy as just saying “off the record, yeah?” and them responding “yeah of course.” Takes five seconds and is really not an issue.
That’s just not how it works, and everyone who interacts with journalists with any regularity at all (like Sam has for years) knows that that’s not how it works.
A lot of people in this thread don’t know those norms and seem to be trying to reason about them from first principles or something. This is not useful. The norms are what they are, have been well-established for decades, and are common knowledge among all relevant parties. Sam has certainly had them explained to him many, many times.
This is entirely on him.
The incentives for them to do so include 1) modelling healthy transparency norms, 2) avoiding looking bad when it comes out anyway, 3) just generally doing the right thing.
I personally commit to making my knowledge about it public within a year. (I could probably commit to a shorter time frame than that, that’s just what I’m sure I’m happy to commit to having given it only a moment’s thought.)
The people who are staying quiet about who they told have carefully considered reasons for doing so, and I’d encourage people to try to respect that, even if it’s hard to understand from outside.
My hope is that the information will be made public from the other side. EA leaders who were told details about the events at early Alameda know exactly who they are, and they can volunteer that information at any time. It will be made public eventually one way or another.
Good question, but tbh I just don’t remember the answer.
I don’t mind sharing a bit about this. SBF desperately wanted to do the Korea arb, and we spent quite a bit of time coming up with any number of outlandish tactics that might enable us to do so, but we were never able to actually figure it out. The capital controls worked. The best we could do was predict which direction the premium would go and trade into KRW and then back out of it accordingly.
Japan was different. We were able to get a Japanese entity set up, and we did successfully trade on the Japan arb. As far as I know we didn’t break any laws in doing so, but I wasn’t directly involved in the operational side of it. My recollection is that we made something like 10-30 million dollars (~90%CI) off of that arb in total, but I’m not at all confident on the exact amount.
Is that what created his early wealth, though? Not really. Before we all left, pretty much all of that profit had been lost to a series of bad trades and mismanagement of assets. Examples included some number of millions lost to a large directional bet on ETH (that Sam made directly counter to the predictions of our best event trader), a few million more on a large OTC trade in some illiquid shitcoin that crashed long before we could get out of it, another couple million in a series of XRP transfers that nobody noticed had never arrived, and that had fallen in value by something like 90% when they finally showed up much later, and various other random small things like a junior trader accidentally transferring half a million dollars of USDT to a BTC address (or something like that) due to a complete lack of safeguards on transfers, etc. Not to mention absurd levels of expenditures, e.g. an AWS bill that at one point reached about a quarter million dollars per month.
My knowledge of the story ends when we left, and my recollection is that at that point the Japan arb had long been closed and most of our profits from it had been squandered. I don’t know how he achieved his later success, but if I were to guess, I’d say it probably has a lot more to do with setting up FTX, launching highly predatory instruments like leveraged ETF tokens on it, and doing similarly shady stuff to the things that brought it all crashing down, but during a bull market that made all of those risks pay off. That’s entirely guesswork though, I have no inside knowledge about anything that happened after April 2018.
Note: All of this is purely from memory, I have not cross-checked it with anyone else who was there, and it could be substantially wrong in the details. It has been a long time, and I spent most of that time trying to forget all about it. I’m sharing this because I believe the broad strokes of it to be accurate, but please do not update too strongly from it, nor quote it without mentioning this disclaimer.
… I assume you realise that that narrows you down to one of two people (given it’s safe to assume Nishad is not currently spending his time on the EA Forum)
I do think I was probably just remembering incorrectly about this to be honest, I looked back through things from then and it looks like there was a lot of back-and-forth about the inclusion of an NDA (among other clauses), so it seems very plausible that it was just removed entirely during that negotiation (aside from the one in the IP agreement).
My understanding is that the answer is basically 2.
I’d love to share more details but I haven’t gotten consent from the person who told me about those conversations yet, and even if I were willing to share without consent I’m not confident enough of my recollection of the details I was told about those conversations when they happened to pass that recollection along. I hope to be able to say more soon.
EDIT: I’ve gotten a response and that person would prefer me not to go into more specifics currently, so I’m going to respect that. I do understand the frustration with all of the vagueness. I’m very hopeful that the EA leaders who were told about all of this will voluntarily come forward about that fact in the coming days. If they don’t, I can promise that they will be publicly named eventually.
Can I ask the obvious question of whether you made money by shorting ftt? You were both one of the most anti-FTX and most still involved in crypto trading, so I suspect if you didn’t then no one did.
I’ve been on leave from work due to severe burnout for the last couple months (and still am), and was intentionally avoiding seeing anything about SBF/FTX outside of work until recent events made that basically impossible. So no, I didn’t personally trade on any of this at all.
One of the biggest lessons I learned from all of this is that while humans are quite good judges of character in general, we do a lot worse in the presence of sufficient charisma, and in those cases we can’t trust our guts, even when they’re usually right. When I first met SBF, I liked him quite a bit, and I didn’t notice any red flags. Even during the first month or two of working with him, I kind of had blinders on and made excuses for things that in retrospect I shouldn’t have.
It’s hard for me to say about what people should have been able to detect from his public presence, because I haven’t watched any of his public interviews. I put a fair amount of effort into making sure that news about him (or FTX) didn’t show up in any of my feeds, because when it did I found it pretty triggering.
Personally, I don’t think his character flaws are at all a function of EA. To me, his character seems a lot more like what I hear from friends who work in politics about what some people are like in that domain. Given his family is very involved in politics, that connection seems plausible to me. This is very uncharitable, but: from my discussions with him he always seemed a lot more interested in power than in doing good, and I always worried that he just saw doing good as an opportunity to gain power. There’s obviously no way for me to have any kind of confidence in that assessment, though, and I don’t think people should put hardly any weight on it.
Personally, I remember telling at least a handful of people at the time that Sam belonged in a jail cell, but I expect that people thought I was being hyperbolic (which was entirely fair, I was traumatised and was probably communicating in a way that signalled unreliability).
I was told that conversations were had with people in leadership roles in EA. I wasn’t part of those conversations and don’t know the full details of what was discussed or with whom.
I’m the person that Kerry was quoting here, and am at least one of the reasons he believed the others had signed agreements with non-disparagement clauses. I didn’t sign a severance agreement for a few reasons: I wanted to retain the ability to sue, I believed there was a non-disparagement clause, and I didn’t want to sign away rights to the ownership stake that I had been verbally told I would receive. Given that I didn’t actually sign it, I could believe that the non-disparagement clauses were removed and I didn’t know about it, and people have just been quiet for other reasons (of which there are certainly plenty).
I think point 3 is overstated but not fundamentally inaccurate. My understanding was that a group of senior leadership offered Sam to buy him out, he declined, and he bought them out instead. My further understanding is that his negotiating position was far stronger than it should have been due to him having sole legal ownership (which I was told he obtained in a way I think it is more than fair to describe as backstabbing). I wasn’t personally involved in those negotiations, in part because I clashed with Sam probably worse than anyone else at the company, which likely would have derailed them.
That brings me to my next point, which is that I definitely had one of the most negative opinions of Sam and his actions at the time, and it’s reasonable for people to downweight my take on all of this accordingly. That said, I do feel that my perspective has been clearly vindicated by current events.
I want to push back very strongly against the idea that this was primarily about Sam’s appetite for risk. Yes, he has an absurd appetite for risk, but what’s more important is what kinds of risks he has an appetite for. He consistently displayed a flagrant disregard for legal structures and safeguards, a belief that rules do not apply to him, and an inclination to see the ends as justifying the means. At this stage it’s clear that what happened at FTX was fraud, plain and simple, and his decision to engage in that fraud was entirely in character.
(As a minor note, I can confirm that the “wireless mouse” phrase does validate ftxthrowaway as someone who was there at the time, though of course now that it has been used this way publicly once it will no longer be valid in the future.)- A personal reflection on SBF by (7 Feb 2023 17:56 UTC; 321 points)
- Sadly, FTX by (17 Nov 2022 14:26 UTC; 134 points)
- Sadly, FTX by (LessWrong; 17 Nov 2022 14:30 UTC; 133 points)
- To what extent & how did EA indirectly contribute to financial crime—and what can be done now? One attempt at a review by (13 Apr 2024 5:55 UTC; 63 points)
Yeah, I think it’s probably fair to say that I worded that a bit too strongly. I do think she fits the reference class significantly less well than many of the other EAs who left (notably, she was only 23 at the time), but I should have been more precise.