Will FTX's Collapse Strand Scientists? (science.org) 82
"Last week's collapse of the cryptocurrency exchange FTX is sending aftershocks through the scientific community," writes Science magazine:
An undergraduate physics major at the Massachusetts Institute of Technology (MIT) who founded FTX and quickly became a billionaire, 30-year-old Sam Bankman-Fried began to back philanthropic organizations that supported a wide variety of science-related causes, most designed to improve human well-being. Now, with FTX in bankruptcy and under investigation for misuse of investors' money, his formerly flush foundations are suddenly strapped for cash and much of that work is at risk. One foundation, the Future Fund, was just launched in February. But by the end of June, its officials reported awarding 262 grants and "investments" totaling $132 million.
It's unclear how much of that money has been distributed. But on 10 November, five senior Future Fund officials resigned and announced in a statement, "We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor...."
Just what will happen to awards the Future Fund and the similar FTX Foundation have already made remains unclear. FTX owes billions of dollars to creditors and is now being investigated by the U.S. Securities and Exchange Commission and the Department of Justice, according to The Wall Street Journal. Writing in an online forum hosted by the Center for Effective Altruism, to which the Future Fund pledged nearly $14 million, Molly Kovite, legal operations manager for the Open Philanthropy foundation, noted that FTX's creditors could try to "claw back" their investments during bankruptcy proceedings. If grantees received awards after 11 August, which is 90 days prior to the bankruptcy filing, "the bankruptcy process will probably ask you, at some point, to pay all or part of that money back" she predicts.
That has grantees wondering how they will pay the bills. "Everyone is obviously really worried," Morrison says.
Thanks to Slashdot reader sciencehabit for submitting the article.
It's unclear how much of that money has been distributed. But on 10 November, five senior Future Fund officials resigned and announced in a statement, "We are devastated to say that it looks likely that there are many committed grants that the Future Fund will be unable to honor...."
Just what will happen to awards the Future Fund and the similar FTX Foundation have already made remains unclear. FTX owes billions of dollars to creditors and is now being investigated by the U.S. Securities and Exchange Commission and the Department of Justice, according to The Wall Street Journal. Writing in an online forum hosted by the Center for Effective Altruism, to which the Future Fund pledged nearly $14 million, Molly Kovite, legal operations manager for the Open Philanthropy foundation, noted that FTX's creditors could try to "claw back" their investments during bankruptcy proceedings. If grantees received awards after 11 August, which is 90 days prior to the bankruptcy filing, "the bankruptcy process will probably ask you, at some point, to pay all or part of that money back" she predicts.
That has grantees wondering how they will pay the bills. "Everyone is obviously really worried," Morrison says.
Thanks to Slashdot reader sciencehabit for submitting the article.
Re:As a scientist myself... (Score:4, Informative)
I rely on NIH and other government grants for research support too. Only a very desperate scientist would turn to a crypto king for research funding. I get it, grants are very hard to come by these days, but when you go that route, don't expect the funding to be reliable. You are basing you funding on speculative investments, and in this case, crooked speculative investments. If their projects are solid, they may be able to get funding elsewhere, so its back to grant writing again.
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- public funded
- funded by organizations who can apply it. (example, Google funding semiconductor research at MIT)
If you can't get those forms of funding... Well, going to a gambler for money won't help your credibility.
Future Fund (Score:1)
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Sorry, but that organization is real and legit. I'm not convinced about how effective it is, but it's at least generally honest.
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Ethicists are well known to be less honest (Score:2)
Sorry, but that organization is real and legit. I'm not convinced about how effective it is, but it's at least generally honest.
Actually ethicists are well known to be less honest. :-)
http://www.faculty.ucr.edu/~es... [ucr.edu]
Smells like (Score:5, Insightful)
Unfortunately, SBF's motivations for this philanthropy will never be known. When you have a clear cut case of a crook doing some good on the back of a lot of evil, it smacks of the mafia giving away turkeys at Thanksgiving from the back of a truck they may not own.
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Unfortunately, SBF's motivations for this philanthropy will never be known. When you have a clear cut case of a crook doing some good on the back of a lot of evil, it smacks of the mafia giving away turkeys at Thanksgiving from the back of a truck they may not own.
They also sponsored a chess tournament earlier this year, the FTX Crypto Cup [chess24.com], with "The richest prize fund ever offered for an online chess event."
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Unfortunately, SBF's motivations for this philanthropy will never be known. When you have a clear cut case of a crook doing some good on the back of a lot of evil, it smacks of the mafia giving away turkeys at Thanksgiving from the back of a truck they may not own.
They also sponsored a chess tournament earlier this year, the FTX Crypto Cup [chess24.com], with "The richest prize fund ever offered for an online chess event."
Is this the one where the supposed chess master admitted cheating?
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Is this the one where the supposed chess master admitted cheating?
No, that was the next event after the FTX cup. Hans (the cheater) did play in it, but he had a rather bad tournament. Definitely not cheating there :-)
Re:Smells like (Score:5, Insightful)
Unfortunately, SBF's motivations for this philanthropy will never be known.
I think motivations are quite apparent, and he may even have commented on them in the past
... See, this makes me fully qualified to financially manage your life savings. Act fast, you don't want to miss out.
(1) Political cover. Make friends with the ruling class and their politicians. Sadly investigations and law enforcement treat people on their friend's list and off, differently.
(2) Marketing. We live in an era where people are judged by their signaled morals rather than actual accomplishments ("talk" no longer has to be followed by successful "action"), and also by their fame (often unrelated to the issue being promoted). In short, look at me hanging out with a former President, look at this endorsement by a football player and a fashion model, look at the list of charities/issues I support,
You took the dirty crypto cash... (Score:5, Insightful)
You took the dirty crypto cash, and now you're whining that it's going to be cut off? I've got a tiny violin playing right here. Next time, don't base your income on stolen money. The only good news is that clawbacks are unlikely since this is crypto and not real investments.
Yeah... (Score:5, Insightful)
I mean, on the other hand, these scientists were getting funded by probably the world's biggest ponzi scheme. At some point you need to take responsibility for where the money you earn comes from. In their case it was a grift so big "it couldn't fail"—until it did.
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Honestly, it wouldn't be terrible if FTX's creditors don't get a cent. They were all buying into a giant ponzi scheme—they should have known better.
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lets hear it for layer 7! (Score:1)
Its corporate, free, open, secure all at the same time and they made an application that prints money!
Maybe we shouldn't rely (Score:4, Insightful)
Re: Maybe we shouldn't rely (Score:1, Informative)
Lol, for most of history, only the government was ALLOWED to do science. Things like questioning the Bible or inventing new things was witchcraft, not allowed and if anything, it wouldnâ(TM)t have been their property anyway, so nobody was motivated enough to do it.
Free and open markets funded the advances in science since the 1800s, factories wanted better, faster and cheaper machines, the microcontroller, the Internet and everything else, the involvement of government was minimal.
You need to read history (Score:2)
Also pretty much everything you described was invented by the gov't. Seriously, if you're gonna troll do a little better please.
Re: Maybe we shouldn't rely (Score:2)
Will sort itself out, kind of a non-issue (Score:5, Insightful)
If they were doing research that had big potential upsides for good then public funding and grants should be able to help continue the work.
If the work has potential in industry then they should be able to secure private corporate funding. You'll have to do a bit of work to sell it but that's part the game as it were.
Sorry the gravy train is apparently over but if you knew this funding was coming from FTX then scientists should have been smart enough to know it was high risk and prepared accordingly, unless of course they got caught up in the easy money allure.
Re:Will sort itself out, kind of a non-issue (Score:4, Informative)
scientists should have been smart enough to know
It's hardly the scientists' job to know that, anymore than it was investors' job to know that they were investing in a Ponzi scheme with gambling elements added for flavor. Heck, even notoriously conservative pension funds were caught in the crypto scam. From scientists' POV, they were being funded by a reputable foundation. Allowing crypto scammers to run their schemes for so long under the disguise of doing respectable business is 100 percent governments' fault. When a bunch of Ponzi schemes imploded in Albania, taking people's life savings with them, the masses took on the streets and toppled their government. Perhaps this has to happen again, in other countries, until politicians and regulators learn their lesson.
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It's hardly the scientists' job to know that
False. This whole "someone else's job to know that" thing is just a way to make excuses for doing bad shit.
anymore than it was investors' job to know that they were investing in a Ponzi scheme with gambling elements added for flavor
It's exactly investors' job to know what they are investing in, and why.
even notoriously conservative pension funds were caught in the crypto scam.
IMO we're going to find out that a lot of those investments were due to some kind of corruption, because nobody who knew what they were doing would have thought that was a good idea.
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If a pension fund had more than 1% of assets in crypto they they were poor fiduciaries. On the other hand, less than 0.25% in crypto could also be considered bad. They need to chase return to stay solvent, but only a few points above cost inflation (traditionally 8-9%, now at least 12%). That puts them into some riskier assets, although ideally not full-ponzi level.
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Not really. The problem with finance and business guys is that they expect everyone to learn their profession, just not well enough to beat them at it.
When you get a CT scan, who is responsible for knowing the machine is in good working order and being operated correctly? Yours or the tech's?
Who is responsible for knowing a subway train is mechanically sound?
If you get stuck in an elevator, is it reasonable to blame YOU because you should have been able to hear the whining bearing that was soon to seize?
If
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The problem with finance and business guys is that they expect everyone to learn their profession, just not well enough to beat them at it.
That's a problem inherent to capitalism. There are lots of other related/similar problems, like how you need to know your shit to avoid being fucked over by a shop, and you gotta have a car to be a first class citizen in most US cities, and they all come back to capitalism too :) It's also why people are loyal when they find an expert they think they can trust.
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It is a general issue. I know from experience that not knowing how HVAC, washing machines, and water heaters work would have cost me several thousand dollars.
Not having some sense of what a business scam looks like would have cost a few thousand more.
The part I take exception to is that if I get scammed by a crooked repairman, he is the bad guy (true) but if I get scammed by a financial crook, it's "my fault" (no it isn't).
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The part I take exception to is that if I get scammed by a crooked repairman, he is the bad guy (true) but if I get scammed by a financial crook, it's "my fault" (no it isn't).
The people managing these big pensions should be that savvy, though. They have that level of responsibility.
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As I said, the professional fund managers DO have a professional duty to know better. The understandability does not extend to them.
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If they are so consumed by work that they can't get a halfway decent bead on where their funding is coming from and what risk it carries from going under then they shouldn't be worrying about it's collapse either, they should have people who handle this for them.
If it's not their job than what are they worried about here? Can't have it both ways.
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Any investment in crypto is wild speculation as there is nothing tangible behind the cryptoschemes. Any pension fund investing in crypto is, by definition, not "conservative".
Many government pension funds are desperate as they, themselves, are a bit of Ponzi scheme which is teetering on collapse -- although likely the unions will prevail on politicians to divert taxpayer money from younger generations to prop up the retired gov
So only researchers in the "political" fields ... (Score:2)
Donated, or "pledged"? (Score:2)
Bernie Madoff (Score:1)
Listen to the new Harry Markopolos [slashdot.org]. Thieves recognize each other.
" Billionaire " (Score:5, Insightful)
Maybe a Moody's grade after the 'billionaire' title? SBF was a cash-millionaire (at best) and a junk-billionaire. That would makes these headlines more sensible.
Re:" Billionaire " (Score:4, Insightful)
"Junk-billionaire" seems to me to work quite well.
virtual-billionaire (Score:2)
"Junk-billionaire" seems to me to work quite well.
I think "virtual-billionaire" similar, more spot on, and a little poetic. :-)
Re:" Virtual Billionaire " (Score:2)
is about as spot on as one can get on multiple dimensions.
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When crypto prices dropped, people wanted to sell/redeem and there was no money. The sad part about this is that FTX was, in essence, very net short on crypto-currencies. Had they only stolen say half of the money, they could have b
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If I had mod points I'd give you some right now. Brilliant.
However it does bring up the question, what would constitute a AAA rated billionaire?
Deja poo (Score:2)
People who bought million dollar homes with payments of 100 dollars a month back in "2006 were obviously really worried" too. But any sane person would figure out it is a scam.
Look, if you play games with the grifter, eventually you fall with the grifter. Get legitimate sources of money, not a ponzi scheme with dodgy characters as your source of money.
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Everybody's saying it's so obvious that SBF was a grifter ("because crypto"). But if millions of people put their money in FTX, was it really so obvious that FTX was a grift?
Keep in mind, no one had to keep their cryptocurrency on the exchange. People chose to do so because it was more convenient. Why do that if FTX was "obviously" a grift?
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Everybody's saying it's so obvious that SBF was a grifter ("because crypto"). But if millions of people put their money in FTX, was it really so obvious that FTX was a grift?
All that shows us in a very direct way, is that there are millions of marks out there.
Keep in mind, no one had to keep their cryptocurrency on the exchange. People chose to do so because it was more convenient. Why do that if FTX was "obviously" a grift?
It's only obvious to those who do not suspend disbelief.
This is exactly what it is. These crypto exchanges are designed to collapse, and they are operating just as designed.
If your income is based on the profits of crime.. (Score:2)
Huh (Score:2)
this post is a clever manipulation by politicians (Score:1, Insightful)
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"Promised but not delivered" is more common (Score:2)
NIH had promised but not delivered money on human-animal chimeric research in the past. Thus researchers are already used to bad surprises.
BTW Giving money that you do not own is not altruistic. It is stealing. And while it can be involved to check the sources of given money, this Ponzi scheme was well discernible.
"Promised delivered" in 2022 midterm (Score:1)
And then there's sports sponsorships (Score:2)
Re: And then there's sports sponsorships (Score:2)
And donations to political parties/candidates (Score:2)
I wonder if the feds will try to claw back any of the money FTX spent on stadium naming rights and putting their logo on MLB umpires.
Lets not forget the political parties and candidates
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Paying back grant money? (Score:2)
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This last part was pretty odd. I'd definitely get a lawyer if you get a letter asking for the grant returned.
Always talk to a lawyer when a court ordered judgement arrives (in many/most larger research organizations there is a corporate lawyer that is the first stop for such things).
The bankruptcy trustees should only be entitled to what funds are left the day the grant receivers are made aware of the situation.
Details always matter, but if the transfers of funds was made under fraudulent or preferential terms, or (and this sounds like a more likely scenario here) were made when when the organization transferring assets was already insolvent, clawbacks can be ordered. But, again, details matter, and the bankruptcy judge will need to determin
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Enjoy it when it happens. (Score:2)
Sometimes funding vanishes. That doesn't mean you should forgo it entirely. With the last of it, put your research in order. Document, organize, summarize... get it ready in case funding appears to reopen it.
You can't run research projects on the basis that funding is infinite. Have a backout strategy.
You want a) an ENDOWMENT and b) in "fiat" (Score:2)
If the Future "Fund" didn't have a endowment--an endowment in the form of cash "fiat" money--or at least a portfolio of conservative assets denominated in "fiat" money--then it was always a shaky reed. If they were gambling on their research funding coming from promise of future cash flow, from investment activity based on FTT play money, then they need to be big boys and accept their gambling losses for what they are.
Ummmmm... (Score:1)
Try the Financial Black Hole of Jerusalem (Score:2)
I would like to point out... (Score:2)
"The Creator of Homebrew's Plan To Get Open Source Contributors Paid - Using Blockchain"
https://news.slashdot.org/stor... [slashdot.org]
Doesn't this article say that that article yesterday is a bad idea?