I changed the title for that reason, but it seems that people disagreed with my decision/reasoning

I changed the title because I learned that Summers likes EA

How does it frame the discussion in a bad way? I thought this was a succinct way to describe an aspect of OpenAI's announcement that is very relevant to the EA Forum.

This is incredibly short-sighted. The board’s behavior was grossly unprofessional and the accompanying blog post was borderline defamatory. And Altman is one of the most highly-connected and competent people in the Bay Area tech scene. Altman can easily start another AI company; in fact, media outlets are now reporting that he's considering doing just that, or might even return to OpenAI by pressuring the board to resign. 

In fact, Manifold is at 50% that Altman will return as CEO, and at 38% that he'll start another AI company. It seems that the board was unable to think even just two steps ahead if they thought this would end well.

The term "global catastrophic risk" has been defined in multiple different and mutually inconsistent ways.^[1] What will the Bay Area EAG focus on, specifically? And is there a specific reason why this term was chosen instead of a less ambiguous one?

1. ^{^}

   That comment doesn't even include all the definitions of "global catastrophic risk" that I've seen. According to Wikipedia, "[m]ost global catastrophic risks would not be so intense as to kill the majority of life on earth, but even if one did, the ecosystem and humanity would eventually recover (in contrast to existential risks)," directly contradicting a lot of other definitions people have given, especially Open Phil.

This doesn't explain why customers who weren't using the margin lending program lost their money. According to Can Sun, the FTX lawyer who testified^[1] today, FTX Digital Markets had the responsibility to ensure the segregation of those customers' digital assets from FTX’s assets. He testified that if FTX went bankrupt, those customers were supposed to still be able to get all of their digital assets back (because it was theirs, not FTX’s). Customer digital assets were not debt; they were the private property of customers. Since those customers don't have their money, something must have gone wrong.

Moreover, Sun testified that he only learned that something was amiss at the same time that everybody else in the world did, at which point Sam asked him for a “legal justification” for the missing funds. He had to tell SBF that “there are no justifications but there are some theoretical explanations.” According to his testimony, he listed a few theoretical explanations, including the margin lending program, but explained that this excuse didn’t work, and SBF seemed to acknowledge that. Sun quit on the following day.

1. ^{^}

   Supporting sources: https://www.axios.com/2023/10/19/ftx-trial-sun-testimony, https://x.com/innercitypress/status/1714999654989860918?s=20,

    https://www.axios.com/2022/11/12/ftx-terms-service-trading-customer-funds (contemporaneous), https://newsletter.mollywhite.net/p/the-ftx-trial-day-twelve, this YouTube vlog

    

    

Levine claimed that the fraud was not in how the money ended up at Alameda, but in how FTX claimed to be safe. I think that's wrong since the "allow_negative" flag looks fraudulent in itself. It just looks like something you'd use to implement embezzlement in computer code.

For what it’s worth, Levine’s account of what the prosecution is trying to claim in the trial also seems wrong. He claims that the prosecution agrees with him, but their opening statement in the trial sounds much more like the version of the story he claims is wrong than the version he claims is correct.

See, for example, the prosecution’s opening statements (summarized by @innercitypress):

Alameda had secret access to FTX assets. Once Alameda had it, the defendant could spend it as he pleased. How did he do it? Two ways. First, customers sometimes deposits dollars on FTX, the company would tell them it was in their accounts. 

But it never made it to FTX. He set up a bank account linked to Alameda. He lied to a bank to set up an Alameda bank account. Then he lied to the customers. He took billions of dollars, the customers had no way to know. 

Here's the second way. He took customers' crypto. Accounts that hold crypto are called digital wallets. He gave Alameda the ability to withdraw - he made sure it was written right into the computer code.

The fact that Levine is wrong is made even clearer in Ellison’s testimony. Again from @innercitypress:

AUSA: What makes you guilty?

Ellison: Alameda took several billions of dollars from FTX customers and used it for investments.

Note that she said “Alameda took several billions of dollars from FTX customers” is what makes her guilty, not “FTX lied to customers about how good their risk engine was.”

This is not at all what happened. Alameda's "borrows" were not made via the normal margin lending program. You can see Caroline Ellison admitting so in a contemporaneous meeting that was recorded and played in court. Nishad Singh and Gary Wang explicitly wrote code to allow Alameda specifically to take customer funds from FTX via the "allow_negative" flag, according to their own sworn testimonies. It seems like Matt Levine is confusing this collapse with the Mango Markets collapse that happened around the same time, his description fits Mango much better than FTX.

Alameda also lied to investors, as Caroline Ellison testified during the trial and pleaded guilty to doing. According to her sworn testimony, it was SBF who directed her to do so.

Does Lightcone have liability insurance? Or any kind of legal insurance or something similar that covers the litigation costs involved in defamation lawsuits? I think posts like these are important, it would be sad if there wasn’t a way to easily protect whistleblowers from having to spend a lot of money fighting a defamation case.