By Sam Easter, Library Assistant
Going Infinite: The Rise and Fall of a New Tycoon by Michael Lewis, the story of the explosive rise and extraordinary fall of crypto mogul Sam Bankman-Fried, is the kind of book that puts readers precisely where and when it happened.
Author Michael Lewis was either in the room, or has sources who were, for every major moment in Bankman-Fried’s life. Lewis got the moment when the financial wunderkind humiliated a fellow Wall Street trader; he has the love letters the crypto tycoon exchanged with an underling. The book is a remarkable bit of reporting and a marvelous insight into how Bankman-Fried thinks.
But there is a moment at the climax of the book, roughly when Bahamian authorities arrive to lead Bankman-Fried away – his cryptocurrency empire fully imploded and the long march toward prison just beginning. One of his lieutenants, searching for clues in reams of company financials, realizes that despite years of service she’s been given far less equity in the firm than her colleagues. Her blood runs cold; her despair turns to fury.
“Sam said to me, ‘I never intended for that to happen to you,” the executive recalls. “And I said to him, ‘It does not matter what you intended!’”
This is probably the most important quote in the book: the moment when a person who has hobnobbed with Anna Wintour and Mitch McConnell and the Bahamian prime minister has to reckon with what he’s done to someone less powerful. And it cuts to the core of Bankman-Fried’s character: that for all his big talk about making the world right through cryptocurrency and high finance and gobs and gobs of money, he was still just a guy who wasn’t paying attention to the details – catastrophically so.
This book has been roundly criticized for Lewis’s doe-eyed, credulous approach to Bankman-Fried’s life and vision. For much of the book, this criticism feels fair. Lewis is obviously taken with the financial whiz, confessing as much from the moment he first meets him – sizing him up as a favor to a friend who is weighing an investment deal with the crypto king. One keeps asking when Lewis will delve into the consequences of his subject’s carelessness, which destroyed the finances of countless investors.
But give Lewis some credit: Going Infinite’s Bankman-Fried is flawed and fully three-dimensional. A massive pile of money goes missing in his early days of crypto trading, and Bankman-Fried just shrugs it off; surely it’ll turn up. He gives powerful people the brush. At the last minute, he tells his harried, overworked assistant that there’s a 60% chance that he’ll go to Texas tomorrow. It’s not because he’s a jerk; Lewis drops hints throughout the book that his subject is neuroatypical. At one point Bankman-Fried confesses to practicing his facial expressions.
What readers will feel frustration with is Lewis’s decision to present all this not as callous recklessness or incompetence, but as the bumbling side effects of financial genius – until the police are at the door, and Lewis suddenly has to ask mid-book why his expectations for Bankman-Fried’s success turned out to be so wildly wrong.
Readers with some familiarity of the crypto industry might feel less surprised. Perhaps the perfect companion to Lewis’s book is Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud, which sees with an unsparing eye everything that Lewis chose not to report about crypto’s shaky underpinnings. The book is written principally by Ben McKenzie, whom you likely don’t remember as a crack journalist, but as a mid-2000s television heartthrob from the wrong side of the tracks in The O.C. He was pretty good!
McKenzie teams up with veteran journalist Jacob Silverman, and the two make a great double act, criss-crossing the country to investigate cryptofinance. But the book is narrated entirely by McKenzie, and we start with the actor, an affable Brooklyn dad with a dusty economics degree who is skeptical about crypto, which looks to him like a financial house of cards – despite all the late 2010s buzz.
“While I wasn’t the only person with doubts about this whole shady crypto thing,” he writes, “I was the only one who was a six-time Teen Choice Award nominee (One day I will win that damn surfboard).”
He and Silverman dig deep into the world of crypto, from one reporting trip or heavy-hitting interview to the next – from conventions inundated with finance weirdos and late-night parties (and a CIA recruiter?) to El Salvador, which made an ill-fated bid to make bitcoin its currency. Every interview request seems oiled by a subject’s handy recollection of McKenzie’s acting career: Hey! You’re that guy from that thing! Beat reporters would kill for that power.
There are some dense financial ideas in this book, and they are all deftly explained – in plain English – around McKenzie’s adventures with Silverman. Maybe the most important is the simplest: that cryptocurrency is just bits of code masquerading as an investment vehicle. People backing it stand to make a lot of money if you buy it, but if you do, you only stand to make money if more people buy it, driving the price up. Those people will, of course, need broader buy-in if they want to see a profit. You see where this is going. This is the textbook structure of a Ponzi scheme.
The book’s climax is an interview with – who else? – Sam Bankman-Fried. There are a lot of journalists (let alone celebrity rookies) who might have fumbled this moment, but McKenzie’s recounting is thrilling, from the verbal chess match he plays to steer a press flak out of the room to the slow prosecution of his case.
It’s all rather complex, but comes down to a simple theme: If this is the future of money, is it just a coincidence that all these flimsy penny-stock securities are making you wealthy? Bankman-Fried comes off as nervous and flummoxed. It’s immensely satisfying, which is a great testament to the book’s storytelling power.
It really is striking that Lewis didn’t lean so heavily on this angle. At one point, he compares cryptocurrency to Dutch tulips – so, surely, the seasoned financial writer understood that he was looking at a bubble, or at least an asset with little to no underlying value.
Maybe the most glaring absence in Going Infinite is Lewis’s reckoning of what this meant for small-time investors. He makes a show of sympathy for the executives and the employees whose lives Bankman-Fried damaged or ruined, but he never really looks closely at mom or pop.
Lewis does deserve credit for sticking around to watch the endgame. And the endgame is a doozy.
When Bankman-Fried’s company went bankrupt, their forensic accountant said that “never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
That’s finance-speak for ‘Man, you need to read this story.’
