Artūrs Kaņepājs

55Joined Sep 2019

Comments
4

Reassuring to read that RP treated the pledged or anticipated crypto donations with caution, and about the crisis management exercises / stress tests. Perhaps others organisations can learn. Thanks.

If FTX leadership had refused, they should have refused to run the FTX Foundation and made it public that FTX leadership had refused the audit. Then, EA leaders should have discouraged major EA organizations from taking money from the FTX Foundation and promoted a culture of looking down on anyone who took money from the Foundation.

 

To continue thinking it through: the above seems like a theoretical sequence of outcomes that would never in fact materialize. More likely FTX leadership would have known ahead of time  and wouldn't have offered funding in the first place. 

I think it's useful to think about what useful actions would have been. But what really matters is - how to act going forward. IMHO any ad hoc decision by FTX founders to request audit for one funder but not another seems problematic. Can be influenced by conflicts of interest, private relations, and a general lack of competence/standards about such situations. Ideally I think there would be a published list of requirements, including audit/governance requirements, to which donors should adhere. 

Then again, donors & appropriate levels of  audit scrutiny probably vary widely, so it would not be easy to specify the details needed.  I guess much can be learned from the KYC/AML (know you client/anti money laundering) practices in banking. Also, some industries can be ruled out completely (I'm not of the opinion that crypto should, but not far from it anymore). An [old] example of an exclusion list for a bank: 
https://www.ebrd.com/downloads/about/sustainability/Environmental_and_Social_Exclusion_and_Referral_Lists_15092008.pdf

 I do think EA is above treating this as a black swan event. Fraud in unregulated finance (crypto even more so) even if at least initially guided by good (no to speak of naively utilitarian) intentions is to be expected.  Most people did not expect this to happen with SBF/FTX, but some did. There's a lot of potential to learn from this and make the movement more resilient against future cases of funder's fraud via guidelines, practices. E.g. clarifying that dirty money won't work towards achieving EA aims. And that EA credibility should not be lent to dubious practices. 

Other than that I agree with the gist of this post & comment but it's also important to gradually update views. Upvoted the comment of John_Maxwel

Thanks for laying this out. May help many to figure out what to do. 
 
My view about a red line at the moment is that a charity should stop accepting donations once it's know that a source is fraudulent. To avoid fraudsters deriving benefit from being associated with the charity. However, when the donations are in the past, there is only a very weak, if any,  PR benefit for the fraudsters at hand.  In that situation an important (and in EA context maybe the main) harm is that keeping the money by charity will encourage future naive consequentialists. So this indirect effect on one side, and the immediate harm to the causes on the other. It's a tough call, glad I don't have to make it.
 

It would be great if the current discussion leads to a clear precedent and it being clearly stated in EA charity policies what will be done in case of funder's fraud. This would give the clear signals to the naive consequentialists and (in case of fraud) make  decisions for charities easier. Actually I bet there are well described precedents and some guidelines available, is anyone aware of such?