I thought I would like this post based on the title (I also recently decided to hold off for more information before seriously proposing solutions), but I disagree with much of the content.

A few examples:

It is uncertain whether SBF intentionally committed fraud, or just made a mistake, but people seem to be reacting as if the takeaway from this is that fraud is bad.

I think we can safely say with at this point >95% confidence that SBF basically committed fraud even if not technically in the legal sense (edit: but also seems likely to be fraud in the legal sense), and it's natural to start thinking about the implications of this and in particular be very clear about our attitude toward the situation if fraud indeed occurred as looks very likely. Waiting too long has serious costs.

We could immediately launch a costly investigation to see who had knowledge of fraud that occurred before we actually know if fraud occured or why. In worlds where we’re wrong about whether or why fraud occurred this would be very costly. My suggestion: wait for information to costlessly come out, discuss what happened when not in the midst of the fog and emotions of current events, and then decide whether we should launch this costly investigation.

If we were to wait until we close to fully knew "whether or why fraud occurred" this might take years as the court case plays out. I think we should get on with it reasonably quickly given that we are pretty confident some really bad stuff went down. Delaying the investigation seems generally more costly to me than the costs of conducting it, e.g. people's memories decay over time and people have more time to get alternative stories straight.

Adjacently, some are arguing EA could have vetted FTX and Sam better, and averted this situation. This reeks of hindsight bias! Probably EA could not have done better than all the investors who originally vetted FTX before giving them a buttload of money!

Maybe EA should investigate funders more, but arguments for this are orthogonal to recent events, unless CEA believes their comparative advantage in the wider market is high-quality vetting of corporations. If so, they could stand to make quite a bit of money selling this service, and should possibly form a spinoff org.

This seems wrong, e.g. EA leadership had more personal context on Sam than investors. See e.g. Oli here with a personal account and my more abstract argument here.

It is uncertain whether SBF intentionally committed fraud, or just made a mistake, but people seem to be reacting as if the takeaway from this is that fraud is bad.

Just because you feel uncertain doesn't mean the appropriate epistemic state for everyone to be in is to be uncertain too. You have to be pretty confident that you've researched all the available information if you're going to tell others that they're prematurely coming to conclusions. Sometimes it really is possible to tell with high confidence whether fraud was committed or not (in some way or another), even if the details aren't out. I think this is one such instance.

Adjacently, some are arguing EA could have vetted FTX and Sam better, and averted this situation. This reeks of hindsight bias! Probably EA could not have done better than all the investors who originally vetted FTX before giving them a buttload of money!

I've seen this mentioned quite a few times, most prominently by Eliezer Yudowsky . I take the point that there were sophisticated investors such as Sequioa, and BlackRock who researched the company and could not detect FTX's possible self-dealing with Alameda. I think it's fair to say that EA probably could not have detected this FTX situation would blow up in exactly the way it did, even with more due diligence.

I also think that it's rational to expect that you apply due diligence to where you are investing your money than where you are receiving it from - and my understanding is that EA (on the whole) was not actually investing in FTX. 

However, what I think should not be lost sight of is that FTX funding made up a very significant amount of EA's funding as a whole: in 2021, it was estimated FTX team's funding made up $16.5 billion of  $46.1 billion (roughly 36%).  (Moskovitz's funding was even larger - roughly 49%.) 

This is incredibly undiversified, especially given how volatile SBF and Moskovitz's wealth is . I am sure  that this is far more undiversified than any large investor who actually put money in FTX. EA therefore stands to lose a lot more if the funding from FTX (or Moskovitz) fell away. I don't want this point to get lost in the debate.

Now, I'm not sure that the answer was that EA should have vetted its funding more. When people are offering you "free" money,^[1] I don't think there is too much obligation to vet it (above any legal obligations that might exist).  I think the answer is probably that EA should have thought about its risk exposure more, given how undiversified and volatile its funding is.  In particular:

• what might happen if FTX or Moskovitz's funding dries up for any reason; and 
• how any negative consequences of that situation could be mitigated. 

For example, I did see somewhere that there had been a statement somewhere suggesting that EAs personally should diversify away from crypto, given how exposed EA is to it generally, but that did not seem to be a very prominent, widely-advertised piece of advice. 

I know also that there is some general career advice for people to build up a decent financial runway for themselves. Perhaps there should have been greater emphasis to the community that if they rely on funding  (grants, salaries) that is undiversified, they should factor that risk in and weigh it with their personal risk appetite.  

1. ^{^}

   I leave aside the question of whether SBF was using EA to "launder" his reputation and therefore arguably the money was not entirely "free". I don't have an informed view on that.