You may be familiar with Curtis Yarvin's idea that Covid is science's Chernobyl. Just as Chernobyl was Communism's Chernobyl, and Covid was science's Chernobyl, the FTX disaster is rationalism's Chernobyl.
The people at FTX were the best of the best, Ivy League graduates from academic families, yet free-thinking enough to see through the most egregious of the Cathedral's lies. Market natives, most of them met on Wall Street. Much has been made of the SBF-Effective Altruism connection, but these people have no doubt read the sequences too. FTX was a glimmer of hope in a doomed world, a place where the nerds were in charge and had the funding to do what had to be done, social desirability bias be damned.
They blew everything.
It will be said that "they weren't really EA," and you can point to precepts of effective altruism they violated, but by that standard no one is really EA. Everyone violates some of the precepts some of the time. These people were EA/rationalist to the core. They might not have been part of the Berkley polycules, but they sure tried to recreate them in Nassau. Here's CEO of Alameda Capital Caroline Ellison's Tumblr page, filled with rationalist shibboleths. She would have fit right in on The Motte.
That leaves the $10 billion dollar question: How did this happen? Perhaps they were intellectual frauds just as they were financial frauds, adopting the language and opinions of those who are truly intelligent. That would be the personally flattering option. It leaves open the possibility that if only someone actually smart were involved the whole catastrophe would have been avoided. But what if they really were smart? What if they are millennial versions of Ted Kaczynski, taking the maximum expected-value path towards acquiring the capital to do a pivotal act? If humanity's chances of survival really are best measured in log odds, maybe the FTX team are the only ones with their eyes on the prize?
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Notes -
Yeah. When I saw the photo of Caroline Ellison I was "bloody hell, is she still a teenager???" and even though I found out that she's twenty-eight, she doesn't look it. Even worse that she went from "straight from college to some quant fund for six months then put in charge of parallel company run by her boyfriend". Take her on as a mid-level person, sure, but CEO of the whole shebang?
There badly needed to be a few fifty+ year old guys in charge, even if that means asking Evil Privileged White Cis Males for help. The other part of the problem is that they are well-connected, so the worst of both worlds: Daddy's influence and connections got them a whole heap of push up the ladder, but there were no corresponding "friends of Dad" in charge so the kids were given a fistful of dollars and let loose in the candy store.
Then when they ran into trouble, there was nobody senior enough to take the wheel and we see what happened. This latest story of the alleged hack is just the icing on the cake, I don't know what rumour to believe next (I could give credence that it's somebody down the chain at FTX who saw everything collapsing around them, knew that Sam wouldn't save their neck, and decided to help themselves to whatever was left in the piggybank because at this stage it's every man for himself. But it could be an outsider altogether, which would just be the finishing touch on how bad this entire set-up was).
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