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 -
There's a LOT more to it than that. His extensive anti DeFi lobbying and his donation history (donating money he didn't have) point to a much deeper rabbit hole than a Bernie Madoff situation. Between this and the possibly related murder of Nikolai Mushegian, it's a very strange time to be in the DeFi sphere. This is like our Epstein.
I know this sounds like a "just trust me bro" post but there isn't a lot written about it that's up to date that I can reference and it's unlikely the media will ever dig deeper.
I don't think I can have an educated opinion on whether the opposition to DeFi was (a) principled advocacy for something he genuinely believed, (b) basic self-interested moves typical of big players in most industries, or (c) nefarious shit that should tank his credibility among honest folk. My money ordinarily would be on (b), but that's just priors.
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