The 3 Most Important Things to Know About Michael Lewis’s SBF Book

Here’s the best of what is in the book — and the biggest things Lewis missed.

Soon after Sam Bankman-Fried’s crypto empire imploded last November, word got out that Michael Lewis — author of nonfiction classics like Liar’s Poker and The Big Short — had unfettered access to his subject during his billionaire rise to his downfall as an alleged fraud. Unfortunately for Lewis, it comes just as the author’s reputation as a storyteller has taken a hit. A recent controversy around the motives of the family in The Blind Side — a movie based on his hit book of the same title — has only upped the stakes around the project. Lewis has framed his new book, Going Infinite, as a “letter to the jury,” the product of more than 100 interviews with SBF, which would presumably tell the story that everyone else has missed. The publication date, October 3, is the same day that jury selection begins for SBF’s sprawling criminal trial, where the Justice Department will try him on seven counts of fraud, conspiracy, and money laundering.

I got an early look at Going Infinite. It is not a perfect book. As journalism, it feels rushed; as a romp, it is not among Lewis’s best. What makes SBF so challenging is that every little thing he has done and said has been pored over by an army of reporters. So, for Lewis, the book’s success boils down to one question: Can the most prominent business reporter in the world deliver the goods on the biggest alleged financial fraud of the past decade? And the answer, unfortunately, is no. Though, to his credit, Lewis did get a lot — particularly, the details about SBF’s tanged and fraught relationship with Caroline Ellison, his ex who also helmed his hedge fund, Alameda Research. And when it comes to the question of fraud, Lewis got closer than anyone to getting Bankman-Fried to admit that he’d knowingly done something wrong.

Here’s the best of what is in the book — and the most important things Lewis missed:

1. SBF was at least aware that $9 billion had been siphoned off from his FTX customers and into his personal hedge fund — and that that created huge risks.

The year 2022 was bad for the crypto markets. After surging through the pandemic and into 2021, a sudden downturn led to two giant collapses with long-running ripple effects. The first was the collapse of TerraUSD and Luna, two interrelated cryptocurrencies that at their peak were worth tens of billions of dollars. The other was the collapse of Three Arrows Capital, a hedge fund that had heavily invested in those coins — and had borrowed billions from other crypto shadow-banking entities. (Both the founder of Terra and Luna, Do Kwon, and one of Three Arrows’ Founders, Su Zhu, are now being held in prison).

At the time, FTX was one of the largest crypto exchanges in the world, and Alameda, his hedge fund, had a reputation as being a top-tier fund. Bankman-Fried himself had offered to personally save ailing crypto lenders with his own money, leading CNBC’s talking heads to compare him to James Pierpont Morgan Sr., who swooped in to save the economy during the Panic of 1907.

It’s been clear for almost a year now that that was always a mirage. Alameda “borrowed” nearly $9 billion in customer accounts from FTX in order to stay solvent — and ended up funding risky investments and SBF’s own personal projects. When FTX started to collapse last year — part of a bank run orchestrated by Chengpeng Zhao, the CEO of rival exchange Binance — the improper relationship between the exchange and the hedge fund was revealed. But Bankman-Fried has always maintained it was a mistake — $8.8 billion that was mislabeled. The biggest accounting error in history maybe, but still just an oopsie.

Lewis is able to add to the sum total knowledge of SBFology by establishing Bankman-Fried knew about the borrowing and failed to do anything about it. About two months before everything collapsed, Ellison had directly told another one of FTX’s co-founders, Nishad Singh, that she was worried that the risk of collapse was getting too great. According to Lewis, Singh then told SBF on the balcony of his infamous Bahamas penthouse that an account of the borrowed money was getting too risky. In October, he investigated this himself — and came to see that the funds were at risk. “It was only then that he could see that Alameda had been operating as if the $8.8 billion in customers’ funds belonged to it. And by then it was too late to do anything about it.”

2. But Lewis is weirdly vague about SBF’s role in misallocating the funds.

How does such a large sum of money get quietly siphoned from one institution to another when both those firms are owned and controlled by the same man? On this, Lewis is silent. On page 217, he first acknowledges that the “loan” happened, but only in a passive way:

“[FTX] had exempted Alameda …”

“For Alameda Research, however, an exception had been made …”

“Sam’s private trading firm was allowed to lose …”

Lewis does not say who authorized the loans, or who knew about it, or really even why they happened. (The collapse of Three Arrows, a pivotal event in the larger saga that led to FTX’s fall, is only mentioned in passing).

There is also no mention of the widely reported allegation that SBF’s lieutenant Gary Wang had programmed in a back door to allow Alameda to borrow unlimited amounts of money without setting off alarm bells — and had done so at SBF’s direction. This explosive claim has been around for nearly a year, and it does not even merit a mention in the book?

3. Lewis wants us to wonder: Did Ellison’s ex-boyfriend bring down FTX?

Bankman-Fried’s relationship with Ellison is a central theme of Going Infinite. Alas, no orgies, no polycule — but there is drama.

Ellison is largely represented here through Bankman-Fried’s eyes, and in selected memos and reports that were made available to Lewis — a perspective that feels notably one-sided.

Not shockingly, she doesn’t come across particularly well. In one quoted document from 2018, she writes out the pros and cons about why she should have left her former boss and ex, Eric Mannes. (“He told me he would probably never love me” is one bullet point). She also wrote a memo to SBF where she laid out that not only did she have “pretty strong romantic feelings” toward her boss, but the thought of his disapproval was distracting and made her worse at her job. When Bankman-Fried responds, he says:

In a lot of ways I don’t really have a soul. This is a lot more obvious in some contexts than others. But in the end there’s a pretty decent argument that my empathy is fake, my feelings are fake, my facial reactions are fake. I don’t feel happiness. What the point of dating someone who you physically can’t make happy?

Lewis tries to make a kind of lovers’ revenge storyline here — and finds a suggestive scenario, if not actual proof. FTX collapsed in the wake of a story by CoinDesk (which has since won a Loeb Award for business journalism) detailing Alameda’s holdings. That report showed how incestuous they were — and prompted Zhao to pull his money from FTX. Lewis notes that one of the contributors to the CoinDesk story was the current girlfriend of Ellison’s Jane Street ex. “The previous month, the couple had visited the Bahamas and stayed with employees of Alameda Research in Albany: Had the leak somehow originated inside the company?” It is a question that’s left hanging there without a satisfying answer. (For what it’s worth, the reporter who broke the story, Ian Allison, told me that he’d first gotten the tip about a month before).