On the same day that Sam Bankman-Fried’s trial begins on federal fraud charges, best-selling author Michael Lewis will release a highly anticipated book on Tuesday about Mr. Bankman-Fried’s failed cryptocurrency exchange FTX.
Mr. Lewis, the author of “The Blind Side,” “The Big Short” and “Moneyball,” interviewed Mr. Bankman-Fried and other top FTX executives for months and had access to the company’s headquarters in the Bahamas for the book, ” Go to infinity.”
The book contains previously undisclosed details about Mr. Bankman-Fried’s empire, from its founding in the Bay Area to its epic collapse in the Bahamas last year. Here are some takeaways.
Is Bankman-Fried guilty?
Mr. Lewis does not give a “yes” or “no” answer. He portrays Mr. Bankman-Fried as delusional and often callous toward colleagues, a young entrepreneur who “thought adults were pointless” and left messes for other people to clean up.
But Mr. Lewis also expresses skepticism about the lawyers and executives hired to handle FTX’s bankruptcy, who have become some of Mr. Bankman-Fried’s harshest public critics. Toward the end of the book, Mr. Lewis writes that Mr. Bankman-Fried’s explanations for FTX’s collapse, implausible as they sound, “remain irritatingly difficult to refute.”
Beginnings in Alameda
Mr. Bankman-Fried founded his first company, the hedge fund Alameda Research, with Tara Mac Aulay, an Australian mathematician who moved in the same philanthropic circles. At some point, Mr. Bankman-Fried “revealed his romantic interest in her” before focusing on her trading skills, Mr. Lewis writes. Ms. Mac Aulay left Alameda during a staff exodus in early 2018 that became known as the “schism.” The fund was losing money: at one point, $4 million worth of digital coins simply disappeared from its accounts.
According to the book, Ms. Mac Aulay increasingly viewed Mr. Bankman-Fried as “dishonest and manipulative,” and other senior Alameda employees accused him of mismanagement. (The missing cryptocurrency eventually turned up on a South Korean exchange.)
“I made people hate each other a little more and trust each other a little less,” Bankman-Fried later wrote of the breakup. “I have severely limited my future ability to do good.”
Political ambitions
As FTX thrived, Mr. Bankman-Fried became a prolific political donor, giving more than $5 million to Joseph R. Biden Jr.’s efforts in the 2020 presidential election. He also met with Sen. Mitch McConnell, the minority leader , and Florida Governor Ron DeSantis. And according to the book, Mr. Bankman-Fried “investigated the legality of paying Donald Trump himself not to run for president.” Some of Mr. Bankman-Fried’s advisers told him that the price tag for Mr. Trump was $5 billion, Mr. Lewis writes.
Relationship with Caroline Ellison
One of Mr. Bankman-Fried’s closest business associates was also his sometime girlfriend, Caroline Ellison. After FTX collapsed, Ms. Ellison pleaded guilty to fraud and agreed to cooperate with federal prosecutors who had accused Mr. Bankman-Fried of stealing funds from customers to finance political contributions and other lavish spending.
Mr. Lewis cites numerous messages that Mr. Bankman-Fried and Ms. Ellison exchanged about their relationship. In one, Ms. Ellison described things Mr. Bankman-Fried had done that bothered her, including “he told me he felt conflicted about having sex with me, then having sex with me, and then me for a few months.” ignored for a long time.”
In a memo to Ms. Ellison, Mr. Bankman-Fried explained the pros and cons of continuing a romantic relationship with her. The pluses included that she was smart, impressive, a good person, and that he enjoyed having sex with her. The disadvantages included the awkward power dynamics in the relationship as well as the possibility of negative publicity if their dating life ever became public.
“In many ways I don’t really have a soul,” he wrote. “My feelings are wrong, my facial reactions are wrong. I don’t feel happiness. What’s the point of dating someone you can’t physically make happy?”
Panic in the Bahamas
Mr. Lewis spent time with Mr. Bankman-Fried at FTX’s headquarters in the Bahamas, just hours after the company filed for bankruptcy in November. He describes a panicked text message that Mr. Bankman-Fried received from Nishad Singh, a top FTX executive who later pleaded guilty to fraud.
“Can you make it work or you and Gary who people blame?” Mr Singh wrote, referring to another manager who has pleaded guilty, Gary Wang.
Later, the book says, Mr. Singh asked Mr. Bankman-Fried personally, “How do we all make sure that we say the others are innocent?” (A footnote states that the account of the conversation was by Mr. Bankman-Fried.)
The bankruptcy of FTX
After FTX filed for bankruptcy last year, a veteran business turnaround expert, John Jay Ray III, took over the company. Mr. Lewis is relying on a series of unusually candid interviews he conducted with Mr. Ray, who has said little about FTX outside of court filings and testimony before Congress.
In the interviews, Mr. Ray described Ms. Ellison as “ice cold” and “obviously completely crazy,” using an expletive for emphasis. He also pointed out that FTX had invested $500 million in Anthropic, an artificial intelligence startup, before dismissing the project as “just a bunch of people with an idea.” Nothing.”
A few weeks after that interview, Mr. Lewis writes, a group of companies including Google invested nearly $500 million in Anthropic, increasing the value of Mr. Bankman-Fried’s stake to $800 million. Mr. Lewis criticized Mr. Ray’s handling of the bankruptcy, likening him to an “amateur archaeologist” who came across artifacts he didn’t understand.
Other tidbits
The book is full of other colorful details that shed light on Mr. Bankman-Fried’s personality and the way he managed his business empire.
When he worked at the high-frequency trading firm Jane Street Capital, some executives were “troubled by Sam’s indifference to other people’s feelings,” Mr. Lewis writes. They cited an incident in which Mr Bankman-Fried publicly humiliated another trader in a complex gambling game popular in the Jane Street offices.
Mr. Bankman-Fried paid comedian Larry David $10 million to appear in a now-infamous Super Bowl commercial for FTX. The company also attempted to sponsor stadiums used by two National Football League teams, the Kansas City Chiefs and the New Orleans Saints, but failed.
Architects designing a new FTX headquarters in the Bahamas were asked to structure the side of the building to resemble Mr. Bankman-Fried’s “unruly hair.”
Mr. Bankman-Fried was unable to name two of the people on FTX’s three-member board. “The main requirement of the job is that they don’t mind doing DocuSign at 3 a.m.,” he said. “DocuSigning is the main task.”