Lewis vehemently rejects comparisons drawn between Bankman-Fried and notorious fraudsters like Bernie Madoff. While he acknowledges certain parallels with figures such as Michael Milken and Long-Term Capital Management, Lewis firmly believes that FTX itself, minus the influence of Alameda hedge fund, has been a lucrative venture. It was Alameda's misuse of customer funds that ultimately landed Bankman-Fried in hot water and could potentially lead to legal consequences. While Lewis does not endorse Bankman-Fried's defense, he chooses to refrain from engaging directly with the matter, leaving it to others to decipher the complexities of the case.
Inside the FTX Chaos
Throughout his interactions with Bankman-Fried and his observations of FTX, Lewis became acutely aware of the disorder within the organization. Describing it with a touch of humor, he likens the atmosphere to a scene reminiscent of "Ferris Bueller's Day Off." Bankman-Fried's abysmal disorganization is highlighted, as he admits to losing substantial amounts of money before eventually rediscovering it. This chaotic backdrop sets the stage for the rise and fall of Sam Bankman-Fried—a story that Lewis masterfully unravels in "Going Infinite."
The Chaotic Rise and Fall of Bankman-Fried
Bankman-Fried, the controversial figure at the helm of FTX, thrived on chaos, much to the dismay of his colleagues. Interestingly, the book that delves into his story contains a hidden gem. Nestled within its pages is an organization chart, not compiled by Bankman-Fried or any FTX employee, but by a psychiatrist who ended up treating several of them in the Bahamas, which serves as FTX's home.
For Michael Lewis, the villain in this tale is none other than the players involved in the bankruptcy process. Specifically, he points fingers at the law firm Sullivan and Cromwell, as well as John Ray III, who was appointed as the CEO of FTX. Lewis criticizes the fact that the same law firm which advised Bankman-Fried during his applications to the SEC and CFTC now finds itself in charge of managing the bankruptcy proceedings. He suggests that this arrangement could potentially generate a staggering $1 billion in fees.
In stark contrast, Lewis reveals that FTX creditors might actually recover their losses, depending on the monetization of the company's stake in the AI startup, Anthropic. Out of the $8.6 billion in customer deposits, a substantial $7.3 billion has already been recouped.
Lewis believes that Bankman-Fried has become a target of public rage since the downfall of his empire. However, he reminds us that just because there is a collective anger, it does not necessarily mean that the target is unjust. Nevertheless, Lewis admits to feeling uneasy about mobs in general, finding them unattractive.
When asked whether he would visit Bankman-Fried if he were convicted, Lewis confidently responds, "I will."
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