Book Reviews | Jan 11 2024
FNArena Book Review: Going Infinite. The Rise and Fall of a New Tycoon by Michael Lewis.
By Rudi Filapek-Vandyck
In November, a jury declared former FTX CEO Sam Bankman-Fried guilty on all seven accusations for misappropriating, and subsequently "losing", billions of dollars in customer funds through closely-linked hedge fund Alameda Research.
Prior to its rapid demise, FTX was the largest exchange in the emerging new world of crypto coins and assets. Given the enormous size of the losses (estimated at circa US$8.6bn), and the irreparable damage done to the crypto-currency narrative (unregulated, the future of money, world-transforming innovation, etc), many have been baying for the former crypto trading posterboy's blood.
Bankman-Fried's sentence will be announced on March 28. At the young age of 31, he might be facing multiple years in prison.
But is he guilty?
The question seems preposterous at face value. Certainly the general public opinion would have no such doubts. Then there's Michael Lewis, author of global best-sellers Liar's Poker, The Big Short and Moneyball.
Lewis doesn't think Bankman-Fried should go to jail. For starters, the administrators that have been in control of FTX since its implosion have been able to recoup close to 85% of all the monies that previously were unaccounted for. There's a fair chance creditors will be compensated in full for their "losses".
Bankman-Fried going to jail, unless his freshly revamped legal team manages to overturn last year's verdict on appeal, thus tells us a lot about how the US legal system operates. Multiple former FTX directors cut a deal with the prosecutors. Even before a judge and jury had been appointed, the odds of Bankman-Fried escaping criminal conviction looked questionable at best.
And so author Lewis finds himself under heavy public criticism once again. Did he lose his objectivity during the many interviews conducted? Certainly, when reading Lewis's insights and observations regarding The Rise And Fall Of A New Tycoon, questions arise regularly whether author and subject didn't become too close during the process. Both spent many hours talking to each other over many months. And it is Lewis himself who admits Bankman-Fried likes to play games and manipulate people, all the while keeping his cards close to his chest.
Going Infinite offers a lot more than close observations about an oddball CEO who temporarily became the crypto world's most famous and widely admired billionaire entrepreneur. The insights about how hedge fund Alameda, and later exchange FTX, operated with a minimum (if any at all) regulatory and accountancy oversight is truly mindboggling.
Even if one assumes a direct correlation with the young age of all main characters involved, and their limited experience in running an operation of the size it became, it still shines a light on how fragile the unregulated house-of-cards otherwise known as the world of crypto is behind the scenes of the global hype.
Surely the question that arises while reading Lewis's chronicle is: should anyone trust these people with their money, any money? And that's not mentioning the eagerness at which venture capital and the world's largest hedge funds threw themselves at Bankman-Fried and Co during the heydays of unbridled crypto enthusiasm. Financial fraud becomes so much easier when millions and billions are involved is definitely one of the observations that (yet again) stand out.
Michael Lewis has turned himself into modern day's financial storyteller par excellence. There's literally no peer. His chronicle about the rise and demise of cryptocurrency exchange FTX adds to the author's track record on the Global Financial Crisis, high-frequency trading, the damaging inner workings of the Trump administration, and the Greed is Good era of the 1980s.
In post-publication interviews, the author has drawn a parallel with the release of Moneyball in 2003, which subsequently has been embraced by the financial sector at large, but which at the time attracted heavy criticism from baseball coaches and their contacts inside American media.
Today, we can all have an opinion about FXT, Sam Bankman-Fried, and the future of crypto generally, but reading Lewis's book at the very least offers some historical perspective, little known details, and plenty of facts and insights on the sector, the characters involved, and, dare I say it, the financial sector generally.
Be ready to be stunned.
Going Infinite. The Rise and Fall of a New Tycoon by Michael Lewis. 255 pages. Publisher Allan Lane.
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