The rise of FTX and Sam Bankman-Fried was a great story. The implosion is even better.
Michael Lewis did not intend to write a book on cryptocurrency. He came across the topic in the fall of 2021, when a friend planning to do business with FTX – one of the world’s largest cryptocurrency exchanges – asked Lewis as a favor to check out the young founder, Sam Bankman-Fried .
A few weeks later, Lewis met Bankman-Fried for the first time. The pair took a walk in the hills near Lewis’ home in Berkeley, California, and Lewis was entranced by the eccentric young man with untamed hair who was worth tens of billions of dollars and sought after by powerful investors and politicians.
“After a few hours I said, I don’t know what’s going to happen to you, but I just want to watch,” Lewis recalled.
Lewis didn’t realize it at the time, but he had secured a front row seat to a widely publicized scandal with huge financial, political and legal implications.
FTX has imploded in spectacular fashion: Federal prosecutors have filed a series of charges against Bankman-Fried, accusing him of money laundering, bribery and orchestrating a fraudulent scheme to embezzle billions of dollars in customer money. (He has pleaded not guilty.) When Bankman-Fried was arrested in the Bahamas last December, Lewis was there and followed him around for about a year.
Lewis has written about financial debacles before, in books about the subprime mortgages that blew up the US economy (“The Big Short”); the risky world of high frequency trading (“Flash Boys”); and how the 2008 financial crisis ricocheted around the world, destabilizing the economies of places like Iceland, Ireland, Greece and Germany (“Boomerang”).
But the story of how Bankman-Fried rose to become one of the world’s youngest billionaires and then saw his empire crumble presented Lewis with new challenges. “It’s the first time I’ve had a protagonist who the reader won’t trust, or who they come to the story with a lot of baggage about,” he said.
In a recent interview from the Bahamas, where he was reporting, Lewis talked about his upcoming book on Bankman-Fried, “Going Infinite: The Rise and Fall of a New Tycoon,” which Norton will release on Oct. 3. and abbreviated version of the conversation.
So what are you doing in the Bahamas?
It’s a cleanup operation for the end of the book. There are three or four people who are very relevant to this story who said six months ago, come back in six months and we can have a free and candid conversation. I’ve been back three or four times since they arrested Sam, and it just keeps getting better as everyone loosens up and loosens up.
You followed him closely before his legal troubles began. When did you first get the feeling that his company was in trouble and possibly fraudulent?
I’d rather not answer that question. I want the reader to experience a surprise when reading it. My own experience will be part of the surprise. There will probably be a trial in October, and the two sides will each take some facts and tell completely different stories. I think I can tell a story that is a better story than either party, that has all the facts and puts the reader in the position to be a juror.
When he was arrested, were you worried that it would blow up or improve your book?
I hate saying this. It’s terrible. It doesn’t give me a good picture as a human being, but my first thought was, ‘Oh my God’ – it was like a lock clicked into place – ‘now I’ve got the story.’ It never occurred to me that this would blow up the book. I kind of thought, how messy is this going to get, as a writer, because I was so involved. No one was watching this like me, so would I somehow be dragged into this? But I got to do my job and it’s been one of the most exciting creative experiences I’ve ever had.
You kept visiting Bankman-Fried. How does his legal situation affect your access to him and do you feel he is more wary in his conversations with you?
He is the ideal subject. He’s locked in his house an hour from my house with an ankle bracelet. He has nowhere to go. It’s incredibly useful, as long as they keep it there. So as long as he welcomes me to the house, it’s fine. I see him about every two weeks.
How did it affect the nature of your conversations with him, after he was accused of fraud, did it change your feelings about what he tells you and how truthful he is?
I’m not going to say more than this, but I’m going to say that the conversations are no different now than before. They used to be rich and interesting and they are rich and interesting now. The nature of the conversation has not changed. They are actually longer. Instead of talking to him for 45 minutes because he had more, I now talk to him for four hours.
Did it complicate your reporting that this is such a public scandal? Are there lawyers trying to get your notes, are there business rivals of his trying to find out what you know?
I’d rather not talk about that. Don’t give me any trouble, I’m trying to finish the book.