I’ve never reread and re-reviewed a book, so this is a first. About one year ago, I did my original review of Michael Lewis’s Going Infinite, the story of Sam Bankman-Fried, the crypto-currency tycoon behind FTX.
The hardcover version of Going Infinite was published in early October 2023, the same day jurors were selected for Bankman-Fried’s trial in federal court. It allowed the book to interact with the trial without interfering with it. It also allowed us readers to act as jurors, sort of. I got a copy of the first edition on the day it became available, delivered by Amazon to my door. I followed the trial when reading the backstory at night.
The paperback version of the book recently was released, with a new Afterword that considers the results of the trials. Bankman-Fried is in prison and painted in his trial as nothing more than a fraudster, stealing other people’s money. Most of the other top management people were also convicted and some are awaiting sentencing as I write this. They all cooperated with the government and threw Sam under the bus to save themselves. Carolyn Ellison, the key witness in Sam Bankman-Fried’s trial has been given a two-year prison term, despite her cooperation with the prosecution.
The reason I read the book again was because this is a moral tale, and it is far more nuanced than the mainstream press and the prosecutors would have you believe. Consider this, Bankman-Fried’s dream for FTX was to make it the most regulated cryptocurrency exchange in the world. He spent millions of dollars trying to influence politicians to set up rules so that FTX and others could set up shop in the U.S. and be regulated like the other security exchanges. No other fraudster ever did that.
Sam Bankman-Fried broke a lot of laws and deserves to be punished. But there was another group who deserve a lot of blame: the lawyers who handled the bankruptcy. First, they coerced Bankman-Fried to put FTX into the U.S. bankruptcy process. The lawyers from the big, national law firms were in it for the fees, of course. They took over $1 billion out of the process. They also made the process much harder than it needed to be. Reading the book, the lawyers come off as criminals too.
During the whole process, much was made of the $8.7 billion in missing customer deposits. This was the assumed amount fraudulently stolen and for the longest time, it couldn’t be found. But after all the lawyers’ fees were paid, the bankruptcy trustee ended up with between $14.5 and $16.3 billion. The wide range is due to the market fluctuations in the values of many of the assets.
I don’t know whether the depositors have been repaid as of this writing, but there is a plan to pay everyone back 118% of the amount they invested. No one will be taking a loss, and all will be getting at least interest on their money. The “lost” money had been there all along. FTX’s accounting records were so bad, they didn’t know. The company was never insolvent.
My point is that this story is far more nuanced than you might think, which is part of why I recommend this book so highly. Plus, reading it a second time, I am reminded that Michael Lewis is probably the best storyteller of business narrative nonfiction. It was as enjoyable to read it the second time as it was the first. Read it and see what you think.
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