The FTX catastrophe (with Byrne Hobart, Vipul Naik, Maomao Hu, Marcus Abramovich, and Ozzie Gooen)
Clearer Thinking with Spencer Greenberg
Understanding Financial Geniuses and Reckless Gamblers
High returns in low risk situations make someone a financial genius, while high returns in high risk situations might mean they are gamblers/nAlameda and FTX were making reckless bets despite the perception that they were financial geniuses/nThe truth might be somewhere in between and they could be both financial geniuses and extreme betters
What the heck happened with FTX and Sam Bankman-Fried? Were there early warning signs that most people failed to notice? What could've been done differently, and by whom? What effects will this have on the EA movement going forward?
Timestamps:
- 00:01:37 — Intro & timeline
- 00:51:48 — Byrne Hobart
- 01:39:52 — Vipul Naik
- 02:18:35 — Maomao Hu
- 02:41:19 — Marcus Abramovitch
- 02:49:38 — Ozzie Gooen
- 03:21:40 — Wrap-up & outro
Byrne Hobart writes The Diff, a newsletter covering inflections in finance and tech, which has 47,000+ readers. Previously he worked at a hedge fund covering Internet and media companies. Follow Byrne on Twitter at @ByrneHobart or subscribe to The Diff at thediff.co.
Vipul Naik holds a PhD in mathematics from the University of Chicago and is currently the head of data science at Equator Therapeutics, a drug discovery startup. He previously worked at a tech startup called LiftIgniter and then at The Arena Group, a media / tech company that acquired LiftIgniter. Learn more about him at his website, vipulnaik.com.
Maomao Hu is a blockchain, fintech, and AI entrepreneur and thought leader. He has been involved in organizations ranging from leading investment banks to new startups, to solve both microstructure problems like market surveillance and macrostructure problems like capital allocation. Currently, he leads development and quantitative research at asset manager Zerocap. Learn more about him at his website, thefirenexttime.com.
Marcus Abramovich is a managing partner at Enlightenment Ventures, an EA-aligned cryptocurrency hedge fund. Marcus also leads a Facebook group and Discord community of effective altruists focused on accumulating capital to donate to EA causes, and advises several cryptocurrency projects. Marcus discovered effective altruism as a PhD candidate at the University of Waterloo and professional poker player. Email him at marcus.s.abramovitch@gmail.com.
Ozzie Gooen is the president of The Quantified Uncertainty Research Institute. He has a background in programming and research. He previously founded Guesstimate and worked at the Future of Humanity Institute at Oxford. Follow him on Twitter at @ozziegooen or learn more about his current work at quantifieduncertainty.org.
Further Reading:
- "Clarifications on diminishing returns and risk aversion in giving" by Rob Wiblin @ the EA forum on why he disagrees with the SBF's risk-taking approach [link]
References:
- 0xhonky. (November 13, 2022, 03:12 AM UTC). https://twitter.com/0xhonky/status/1591630071915483136. Twitter. [link]
- alamedatrabucco. (April 22, 2021, 10:37 AM UTC). https://twitter.com/alamedatrabucco/status/1385180941186789384. Twitter. [link]
- Allison, I.. (November 2, 2022). Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet. Coindesk. [link]
- Austin. (November 14, 2022). In Defense of SBF. Effective Altruism Forum. [link]
- autismcapital. (November 12, 2022, 07:33 AM UTC). https://twitter.com/autismcapital/status/1591333446995283969. Twitter. [link]
- Berwick, A.. (November 13, 2022). Exclusive: At least $1 billion of client funds missing at failed crypto firm FTX. Reuters. [link]
- carolinecapital. (April 5, 2021, 11:41 AM UTC). https://twitter.com/carolinecapital/status/1379036346300305408. Twitter. [link]
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- Levine, M.. (November 14, 2022). FTX's Balance Sheet Was Bad. Bloomberg. [link]
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- Morrow, A.. (November 18, 2022). ‘Complete failure:' Filing reveals staggering mismanagement inside FTX . CNN. [link]
- Nick_Beckstead, leopold, ab, & ketanrama. (November 10, 2022). The FTX Future Fund team has resigned. Effective Altruism Forum. [link]
- Partz, H.. (November 9, 2022). FTX founder Sam Bankman-Fried removes “assets are fine” flood from Twitter. Cointelegraph. [link]
- Piper, K.. (November 16, 2022). Sam Bankman-Fried tries to explain himself. Vox. [link]
- Regan, M.P. & Hajric, V.. (November 12, 2022). SBF vs CZ: How 2 crypto billionaires' social media “bloodsport” went from keyboard warrior shenanigans to a $32 billion blowup. Fortune. [link]
- Rosenberg, E., Khartit, K., & McClay, R.. (August 26, 2022). What Is Yield Farming in Cryptocurrency?. The Balance. [link]
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- Sigalos, M. & Rooney, K.. (November 9, 2022). Binance backs out of FTX rescue, leaving the crypto exchange on the brink of collapse. CNBC. [link]
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- Tsipursky, G.. (November 16, 2022). SBF's dangerous decision-making philosophy that brought down FTX. Fortune. [link]
- whalechart. (November 15, 2022, 06:46 AM UTC). https://twitter.com/whalechart/status/1592408565402464259. Twitter. [link]
- Wiblin, R. & Harris, K.. (April 14, 2022). Sam Bankman-Fried on taking a high-risk approach to crypto and doing good. 80,000 Hours. [link]
- Yaffe-Bellany, D.. (November 14, 2022). How Sam Bankman-Fried's Crypto Empire Collapsed. The New York Times. [link]
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- FTX (company). Wikipedia. [link]
- Sam Bankman-Fried. Wikipedia. [link]
Staff
- Spencer Greenberg — Host / Director
- Josh Castle — Producer
- Ryan Kessler — Audio Engineer
- Uri Bram — Factotum
- Miles Kestran — Marketing
Music
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