EA - Some Comments on the Recent FTX TIME Article by Ben West

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Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Some Comments on the Recent FTX TIME Article, published by Ben West on March 20, 2023 on The Effective Altruism Forum.BackgroundAlameda Research (AR) was a cryptocurrency hedge fund started in late 2017.In early 2018, approximately half the employees quit, including myself and Naia Bouscal, the main person mentioned in the TIME article. At the time, I had considered AR to have failed, and I think even the people who stayed would have agreed that it had not achieved what it had wanted to.Later in 2018, some of the remaining AR staff started working on a cryptocurrency exchange named FTX. FTX grew to become a multibillion-dollar company.In late 2022, FTX collapsed. It has since been alleged that FTX defrauded their investors by misrepresenting the relationship between AR and FTX, and that this effectively led to them stealing customer deposits.The recent TIME article doesn’t make a very precise argument; here is my attempt at steelmanning/clarifying a major argument made in that article, which I will then respond to:Some EAs worked at AR before FTX startedEven though those EAs (including myself) quit before FTX was founded and therefore could not have had any first-hand knowledge of this improper relationship between AR and FTX, they knew things (like information about Sam’s character) which would have enabled them to predict that something bad would happenThis information was passed on to “EA leaders”, who did not take enough preventative action and are therefore (partly) responsible for FTX’s collapsePersonal BackgroundI worked at Alameda Research (AR) for about three months in early 2018. I was not involved in stealing FTX customer funds, and hopefully people trust me about that claim, if only because I quit before FTX was founded.To make my COI clear: I left the company I founded to join AR; doing so was very costly to me; AR crashed and burned within a few months of me joining; I blamed this crashing and burning largely on Sam.People who know I had a bad experience at AR are sometimes surprised that I’m not on the “obviously Sam was obviously 100% evil” bandwagon. I’ve been wanting to write something but found it hard because there weren’t specific things I could react to, it was just some vague difference in vibes.So I appreciate the TIME article sharing some specific things that “EA Leaders” allegedly knew which the author suggests should have caused them to predict FTX’s fraud.My Experience at AR at a High LevelI thought Sam was a bad CEO. I think he literally never prepared for a single one-on-one we had, his habit of playing video games instead of talking to you was “quirky” when he was a billionaire but aggravating when he was my manager, and my recollection is that Alameda made less money in the time I was there than if it had just simply bought and held bitcoin.But my opinion of Sam overall was more positive than the sense I get from the statements in the TIME article. (This is not very surprising, given that the TIME article consists of statements that were probably intentionally selected to be the worst possible thing the journalist could find someone to say about Sam.)It's hard to convey nuance in these posts, and I'm sure someone is going to interpret me as trying to defend Sam here. This is not what I’m trying to do, but I do think it’s worth trying to share my reflections to help others refine their models.Adding my personal experience to supplement some statements from the articleBut one of the people who did warn others about Bankman-Fried says that he openly wielded this power when challenged. “It was like, ‘I could destroy you,’” this person says. “Will and Holden would believe me over you. No one is going to believe you.”I don’t want to speak for this person, but my own experience was pretty different. For example: Sam was f...