Yes, we need to apply similarly rigorous analysis to our (major) sources of funding as we do to the destinations of that funding.
Sam Elder
It is good that you and the rest of prominent EA leaders are adopting this stance now, at least preferable to doubling down or even focusing exclusively on our ignorance with a “wait and see” attitude.
But Rob, respectfully, we also have questions.
Given the scope of its audience and the apparently extensive preparation and effort you advertise that it takes, your 80k interview with SBF both presented him in a very favorable light and, at least in retrospect, was a huge missed opportunity for us as a community to ask questions that could have raised red flags.
For that interview, were there any topics that were considered off-limits? Given the hesitance you express, at least in this post, about crypto in general, did you consider asking any difficult questions about FTX’s business? At the time, were you aware of the continued Alameda-FTX connection and “open secret” that they were self-trading?
What thinking influenced the overwhelmingly positive “let’s all learn from SBF’s example” framing that you brought to the interview? What about SBF’s business career in crypto, seemed admirable to you beyond his philanthropy and (now known to be illusory) success? Did anyone on staff who is even more skeptical than you of crypto/FTX have a look over the questions ahead of time with a critical eye?
I don’t generally believe that you failed to disclose any conflicts of interest—it was pretty clear to me at least that SBF was funding a large number of EA causes, and that’s why you were inviting him on. But I think there’s a lot of information we now clearly wish we could have gotten from that interview, but didn’t.
EA should absolutely be vetting its funding more. You already gave three reasons: risk of the funding drying up (diversification being a possible solution), legal obligations (as evidenced by the possibility of clawbacks), and the reputational effects of EA laundering its funders’ reputations. There are also significant reputational effects going the other way, as evidenced by the costs of SBF’s fall to EA’s reputation.
Are we talking about this deleted comment? It has 6 overall karma in 9 votes, and −3 agreement in 5 votes.
Either way it seems highly unlikely that the deleted comment I linked to had lots of negative votes. It had a few disagree votes but very likely not more than 1-2 karma downvotes.
I think the proposal I’ve been floating around in a few scattered comments meets your criteria:
First, we build a trusted major charity donor evaluation organization analogous to GiveWell. They would be responsible for researching questions like: What sorts of projects does this donor like to fund? What size checks do they write? What level of influence do they wish to have over the projects they fund? What are our best guesses for the ethics around how this money was earned? How likely is this funding to disappear?
They would approach these questions with the same rigor that GiveWell brings, considering both the outside view of the industry and the inside view of any access the donor makes available, with any omissions duly noted in their report.
Then, if SBF wants to start the FTX Foundation and hire whoever he wants to, he can do it. The GiveWell-analogue would evaluate it on these criteria based on the best available evidence.
Prospective grantees could then look at the report and be well informed about the risks when they apply for and take the funding. If it looks especially risky, as it’s pretty clear FTX would have, they can generate appropriate backup plans or avoid applying for the funding altogether.
In my opinion, no one should have been stopped from taking FTX money, but the fallout would have been much more mitigated if we had put up appropriate warning flags around it ahead of time.
I don’t have much hope that the charity side of things could have influenced FTX to be less risky—from what I can tell, a high tolerance for risk was core to their business practices. I just think it could have given EA folks who aren’t crypto-savvy a lot more sobriety around FTX’s relationship to EA and make them consider the potential downsides of taking FTX funding. It also would have helped in the media/reputation fallout if the donor evaluator I have in mind would have clearly labeled FTX as risky or having withheld information.
Independent of this particular case to mitigate against, I also think such a donor catalog and evaluation system would be a benefit to the community, as a sort of one-stop shop for potential grantees to learn about their options for seeking funding.
It is well-written, but I am not particularly convinced by the fantasy fiction analogy — it feels a lot more like “Here’s this very different situation, and you agree that the conclusions would be different. That would even be true if we modify it in several hard-to-imagine ways.”
In particular, I don’t see any reasonable analogies for:
EA’s “Earning to Give” career path, up to and including 80k featuring a profile on SBF as an exemplar.
The specific logic of “my marginal money is going to be donated” ⇒ “I should be closer to risk-neutral”, which I haven’t really seen rebutted on the facts (most instead argue that in reality, SBF/FTX/Alameda went too far and were risk-seeking).
That SBF ultimately contributed such a paltry amount of his apparent fortune is more impactful, but mainly as a reminder of how small and vulnerable EA actually is. It might very well be true that we didn’t mean that much to SBF, but he meant a lot to us.
I agree that if I, personally, had steered SBF into crypto, and uncharacteristically failed to add on a lot of “hey but please don’t scam people, only do this if you find a kind of crypto you can feel good about” I might consider myself more at fault.
Given how big of a role EA apparently had in the origin of Alameda (Singh says in the Sequoia puff piece that it wouldn’t have started without EA), there very likely are many members of the community who offered more encouragement and/or didn’t give as many warnings as they should have.
I don’t know what point that fault transcends the individual and attributes to the community, but at the very least, adding up other individuals’ culpabilities in steering SBF to crypto without appropriate caution would seem to put a lot of the blame you say you personally avoid on EA as a whole.
She is a journalist whose previous interaction with SBF had been a published interview. He clearly approached the conversation too casually, but, I mean, he’s also still tweeting. His own reaction was much more “welp, gives you some color” than actually furious about it.
You also have to consider the implications of holding onto the information rather than publishing it. I think it would be far worse for Future Perfect, who SBF gave money to, to be seen as trying to hide information about his internal mindset.
Maybe you might argue she shouldn’t have reached out in the first place, but I think it’s pretty clearly newsworthy stuff!
It clearly influenced her editor.
That’s how I read him too. They want to show that they wouldn’t bury the piece because of his sponsorship.
I think there’s a kernel of truth to this suggestion! I would put it this way: EA should be global, and it should continue to be powered by communities, but those communities should be local and small.
First, work in specific cause areas should continue to happen globally, but should not operate with an automatic assumption of trust.
“Low trust” wouldn’t mean we stop doing a lot of good; it would just mean that we need to be more transparent and rigorous, rather than just having major EA figures texting with billionaires and the rest of us just hoping they do it right.
GiveWell is a great example of an EA institution built in a “low trust” framework. And it’s great! It would be very hard for me to imagine anything nearly this bad happening in the global health and well-being side of EA precisely because of places like GiveWell.
But small, high-trust community is also great! And we should encourage that — more local meetup groups, more university groups. I agree that funding for such things, after the “startup phase,” should also be a bit more locally-sourced, with alumni funding university groups since students usually lack sources of income.
When I first hosted some EAs for a dinner in my home, someone in the group asked if I wanted funding for it. I had enough context in the EA community that I knew where this sentiment was coming from, but I still found it weird to imagine the tendrils of central EA funds reaching all the way down into my little house dinner. And given that the source was probably, at least counterfactually/fungibly, FTX, I’m glad I didn’t take it.
One under-discussed aspect of this: What shape does your utility curve look like for negative dollar returns?
I’ve been trying to figure out why SBF seems very much to have not just been risk-neutral in his business approach, but quite probably was actively risk-seeking, seeking to make correlated bets (mainly amounting to longs on crypto in general) that all crashed this year.
It seems quite possible to me that SBF saw the downside of Alameda/FTX losing $10B as not nearly as bad as the upside of them making $10B would be good. Consider:
Depositors losing their money means that you’re taking from people mostly in developed countries who likely have some cash to spare.
SBF’s parents are law professors who could probably help him legally if he ran into trouble.
Even if SBF and the rest of his leadership end up in jail, that’s only harm to a small number of people, compared to the many he could help in a positive situation.
The ensuing media firestorm has at least made a larger number of people aware of the ideas of EA, which are compelling on their own independent of the goodness of their practitioners.
To be clear, I’m not endorsing this perspective at all… I’m just trying to see if SBF could have been reasoning along these lines, even if he wasn’t doing so publicly.
For the rest of us, particularly those trying to act based on the funding being provided, I think it would have been far more helpful to actually examine the potential downside risk that SBF himself was already highlighting with his approach to risk.
This would have meant Rob asking questions like: “If you endorse these sort of high-risk double-or-nothing bets, and you’ve made it clear that you’re not letting up on that even now that you’ve made billions, should we anticipate a decent likelihood of hearing that FTX has gone bankrupt sometime soon?” Visualizing, and more broadly discussing that very real possibility would have hopefully muted the impact on the EA community when it actually came to pass. And then, after dwelling on the seemingly-zero downside possibility, the natural follow-up question would dive into SBF’s valuation of negative returns.
I feel like the story that Rob told fell into the classic winner’s fallacy mindset of highlighting a risk someone took seemingly after it was successful. The issue was that those risks weren’t just in the past.
I’m a bit confused: Which authorities would the whistleblower report to, especially if they aren’t reporting any crimes?
Don’t read too much into this piece of journalistic flair. It’s common practice to end pieces like this (in a paragraph or two known as a “kicker”) with something that sounds poignant on first glance to the reader, even if it would fall apart on closer scrutiny, like this does.
It doesn’t.
I think your point about the various “warning flags” is well-taken. Of course, in retrospect, we’ve been combing the forums for comments that could have given pause. But the volume of comments is way too large to imagine we would have actually updated enough on a single comment to make a difference.
That said, I think the mass exodus of Alameda employees in 2018 should have been a bigger warning flag, cause for more scrutiny on the business, to the extent where those with a concern for the risks should have tried to dig deeper on those employees, even with the complications that NDAs can pose. We can’t say we weren’t aware of it—that episode even made it into SBF’s fawning 80k interview, albeit mostly framed as “how do you pick yourself up after hardships?”.
The best case scenario conclusion of such an investigation very likely wouldn’t have been “SBF is committing massive fraud” especially as that might not have happened until years later. But I think it still would have been useful for the community to know that SBF had a reckless appetite for risk, so we could anticipate at least the potential for FTX to just outright collapse, especially as the crypto industry turned sour earlier this year.
I haven’t waded into the deep end of comments elsewhere but just want to make a simple point: the way Bostrom’s apology starts is awful.
“I do think that provocative communication styles have a place—but not like this!”
This comment just plainly doesn’t make any sense! It’s saying that he believes in provocation as a style, but has a problem with…the provocative style in which he once expressed that view. And there’s no further clarification of the places where provocative communication styles are appropriate, and how his thinking has changed (even if it changed within 24 hours) on whether this particular example was appropriate or not.
Everything in the entire discussion seems downstream of this core point, which is completely botched in the apology. There are similar moments in the rest (like the “what about eugenics?” discussion, or decrying “sloganeering”) that could be dissected alone but this one is emblematic enough on its own.
This is a good start. But in my opinion, the questions we need to wrestle with are more structural.
For instance, when EA (as a collection of institutions and individuals) was considering taking donations from a single donor to the extent SBF offered, what due diligence did we attempt to go through of the business practices of Alameda and FTX? Was this failure a case of blind trust, a coordination failure (surely Sequoia Capital did their due diligence…), or a known, calculated risk?
I see a lot of attempts to clarify that fraud is bad. But if we actually believe that, what attempts have there been to actually check whether fraud was occurring until this week? If we were genuinely caught off-guard, what did we previously believe about the actual business of FTX?
It seems like at the very least our baseline expectation should have featured a much higher degree of skepticism than seems to have been brought to the whole endeavor of entrusting a decent chunk of the financing and reputation of the entire EA movement to an offshore crypto business.