Come Tuesday, our eyes will be trained on the Manhattan Federal Court for the trial of Sam Bankman-Fried, the disgraced cryptocurrency entrepreneur accused of orchestrating “one of the biggest financial frauds in American history”: the multibillion-dollar collapse of FTX, the crypto exchange he founded and led.
SBF, as he’s known, has pleaded not-guilty to some seven charges of fraud and conspiracy. But, as we wait to hear both his version and the government’s version of what happened, there will be another tale recounting how things played out: “Going Infinite,” a book by Michael Lewis chronicling the rise and fall of SBF, is set to debut on the first day of the trial.
The episode has fired up a lot of people, indignant at what they feel was too-easy treatment for someone who many believe brought down the whole crypto house.
The germination of “Going Infinite” sounds as unlikely as the story of SBF himself.
In an interview broadcast yesterday on 60 Minutes, Lewis, the famed chronicler of financial adventure and misadventure — his books include “Liar’s Poker,” “Moneyball” and “The Big Short” — said that he didn’t set out to write a book about SBF. Rather, Lewis claims he was introduced to him in early 2021 by a friend who wanted to back FTX. Before any financial commitment, that friend asked Lewis to meet the young billionaire — both lived in Berkeley — to “evaluate his character.”
No, we don’t find out who that friend is, nor do we find out if that particular investment was ever made — SBF did raise some $2 billion, including $1 billion in 2021, from backers that included Sequoia, Temasek, Tiger Global and dozens more.
But we do find out that another investment, of sorts, was made on that day: Lewis himself was so taken with the idea of SBF and his apparent brilliance that he came away with the decision to write about him.
“Eighteen months earlier, he had nothing. Now he had $22.5 billion. He was the richest person in the world under 30 [and] he was going to spend it to save humanity from extinction,” he said. “My jaw was on the floor.”
The two proceeded to meet more than 100 times over the next two years. As SBF’s fame and his company’s bank account grew, 60 Minutes itself even got involved. The program shot (and it shows here) one segment with SBF talking as he shuffles cards with his leg twitching nervously behind his desk (why? we don’t find this out, either) as Lewis, with a flourish of his pen and a look of concentration on his face, dashes off notes on his yellow legal pad.
Later in the show, you get other behind-the-scenes, unnerving glimpses of how the wizard operated behind the curtain. For instance, Lewis recounts how he was in the room when SBF made his first television appearance.
“If you watch the clip, you’ll see his eyes going back and forth,” he said. “It’s because he’s trying to win his video game at the same time he’s on the air.”
“If you watch the clip, you’ll see his eyes going back and forth. It’s because he’s trying to win his video game at the same time he’s on the air.” Michael Lewis
Friendships and lucrative marketing deals followed, with sports icons like Tom Brady (who was paid $55 million) and Steph Curry ($35 million) to “lend FTX legitimacy and edge.” Even Anna Wintour, the icy fashion doyenne, was in contact: She reached out, over what must have been a hell of a Zoom meeting, to ask SBF — whose preferred get-up is/was wildly curly hair, t-shirts and cargo shorts — to sponsor her very fancy Met Costume Ball. Desperate times!
As trades on FTX climbed up to $15 billion/day, SBF, of course, also got tied up in the corridors of political power.
Lewis said that he met with the young crypto king ahead of him seeing Mitch McConnell to discuss how he could fund political candidates who were looking to offset Trump’s influence in the Republican Party. We find out that the gravitational pull of cargo shorts was a tough one to pull away from: The suit SBF brought to wear to the McConnell meeting was tightly balled up under his arm with his dress shoes falling out of the middle of the bundle. We’ve all been there, Sam. (Well, perhaps not Anna.)
Lewis also claimed that SBF had concocted a plan to buy off Trump, to get him not to run again for president.
“Like how much would it take to get an answer?” Lewis recounted. “There was a number that was kicking around… this was $5 billion.” He said that Sam was never sure whether that figure came directly from Trump. And no, we don’t find out if he ever did wire anything to camp Trump. That would be a wonderful detail to get teased out in the trial, though.
And lest you think Biden and the Democrats have their hands clean of SBF… think again: He also looked to back candidates on that side of the aisle. You never know when you might need a friend!
The hard crash
All of that activity, of course, came to a crashing end: The value of cryptocurrencies on FTX was not banked to much more than speculation and the promise of higher value, and so when those valuations fell, they fell very, very hard.
What we already knew was that SBF has been denied bail; his name is mud (or much worse) among those who have lost money in Alameda or FTX; and those who might not have had positions in these still blame him for other crypto woes because he set off a ripple effect.
“He doesn’t come off good at all here. You can tell he had no experience in management or handling such big undertakings. I think he was in way over his head,” Ayelet Noff, the CEO and founder of public relations firm Sliced Brand, which represents a number of cryptocurrency businesses, told TechCrunch. “I think he does a disservice to the whole community. He pushed back crypto adoption by at least a year or two. Each time one of these things happens it brings back the whole market. It’s two steps forward and one step back.”
But even so, Noff is defensive: She also believes crypto is no worse than the stock market, which can also be manipulated and mishandled.
“Even when you identify corruption, I don’t think that means we don’t believe in the system in question,” she added.
Yet Lewis’s picture is a little less stark from the looks of the 60 Minutes episode. In fact, I’d say it’s not that clear at all if SBF is getting a kicking or a coat of polish in this interview when you consider Lewis’s celebration of SBF’s self-proclaimed (yet not quite proven) idealism, and the “Bankman-Fried-shaped hold in the world” that exists.
You could say that confused message is very apt for cryptocurrency, where the process by which it works is forever murky and often misrepresented, at least to most people.
If SBF didn’t intentionally aim to cynically defraud a bunch of people, in the long run he became one of the many who disastrously failed to manage the risk inherent in crypto speculation. That’s ultimately what happened with FTX, as financial discrepancies racked up between the exchange and its sister company Alameda Research (a trader itself on the platform). The failure is indisputable: The jury will now have to decide how criminal, and how far, his intentions were around that.