Going Infinite

 I recently read "Going Infinite" a 2023 book by Michael Lewis.  This book chronicles the rise and spectacular fall of Samuel (Sam) Benjamin Bankman-Fried (henceforth SBF as he was known).  Born in 1992 SBF briefly became a multi-billionaire through his cryptocurrency exchange FTX which he founded in 2019.  However it all came crashing down in late 2022 through the equivalent of a bank run.  FTX's customers lost confidence in the exchange and tried to withdraw their funds.  FTX could not meet these withdrawal demands and declared bankruptcy because there was a $8 billion hole in their books.  SBF was soon arrested in the Bahamas (where FTX was then located) and extradited to the US where he was convicted of multiple charges in November 2023. 

I have read a number of Michael Lewis's books.  I liked some of them a lot, others not so much.  In my view this is one of the lemons.  Apparently the book came about because Lewis was asked by an investor friend to meet with SBF and evaluate him.  Lewis met with SBF and formed a favorable impression.  This led to SBF granting Lewis more access so that Lewis could write a portrayal that they probably both expected to be generally positive.  While the book is not clear about sources much of it appears to be based on stories SBF told to Lewis.  But SBF must be considered an unreliable narrator and some of the stories don't make a lot sense if you think about them too much. 

SBF attended MIT graduating in 2014 with a degree in physics and a minor in mathematics.  He then worked for Jane Street Capital for a while before leaving in 2017 to strike out on his own.  He cofounded Alameda Research and then in 2019 FTX.  He maintained a controlling interest in both.  He initially was very successful as cryptocurrency took off.  But the businesses were not built to endure tough times and collapsed in 2022 when cryptocurrency cooled.  The proximate cause was FTX had in effect loaned Alameda $8 billion (of customer deposits which FTX was obligated to safeguard) which Alameda was unable to promptly repay when FTX needed the money to meet customer withdrawals.  A contributing factor was SBF's refusal for whatever reason to adopt the accounting and risk management controls normal for businesses handling billions of dollars.     

The book largely covers SBF's rise with relatively little about his downfall.  It ends before he is tried and convicted after three top lieutenants, Caroline Ellison, Gary Wang and Nishad Singh, testified against him.         

SBF seems to have been a reasonably smart guy who lacked conventional people skills.  But he did seem to have some strange form of charisma which caused people including Lewis to overlook what might otherwise have been seemingly obvious red flags like his firm's lack of a chief financial officer (CFO).  Perhaps something akin to Steve Job's purported reality distortion field.  However as Philip K. Dick famously said: “Reality is that which, when you stop believing in it, doesn't go away.”.  Perhaps SBF believed (and was able to convince others) that you could run a multibillion dollar crypto enterprise without carefully managing risk and not court disaster.  But reality is that you can't. 

One of SBF's eccentric traits was an addiction to video games which extended to playing them during zoom meetings with important people.  To some extent he seems have treated life as a video game where other people are just characters to be manipulated with no need to concern yourself about their fate.  At the end SBF seems detached from reality unable to accept that he has committed serious crimes.  Lewis also seems unwilling to explicitly say this although it is pretty clear from the facts he presents.  But Lewis takes some shots at John Ray who was in charge of administering the bankruptcy estate and recovering what funds he could for the creditors.  Which even if fair were largely irrelevant to the question of SBF's guilt.       

This book wasn't totally worthless but I found it a bit disappointing and won't recommend it.