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The Rise and Fall of SBF

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I first got to know author Michael Lewis, then of “Liar’s Poker” fame, when in the mid-1990s I took him around Silicon Valley in an old beat-up convertible. I told stories and showed him where the first integrated circuit and microprocessor were invented, plus Xerox Parc and its beanbag chairs, Hewlett Packard and Intel. As we drove around, I shared my history with entrepreneur Jim Clark, his time at Silicon Graphics and early days with Netscape, and of the venture capitalist Glenn Mueller, who committed suicide after being denied access to invest. 

I then watched in awe as a seed of an idea bloomed. Mr. Lewis practically moved in with Mr. Clark while writing his terrific book “The New New Thing.” As his time with Oakland A’s executive Billy Beane of “Moneyball” and Michael Oher of “The Blind Side” proved, he has a bloodhound’s nose for putting himself in the epicenter of gripping drama. When I first heard that my friend was embedded with crypto wunderkind Sam Bankman-Fried of FTX, I thought, “Of course he is.” The result is “Going Infinite: The Rise and Fall of a New Tycoon,” out Oct. 3.

I recently had lunch with Mr. Lewis in Larkspur, Calif., to learn more. “Before Covid,” he explains, “I decided my next book would be extremely character-based.” In October 2021, after a friend asked him to check out SBF, “Sam tumbles out of an Uber and I took him for a hike,” Mr. Lewis recalls. “I think it was the first hike he’s ever been on even though he wears a crumpled T-shirt and shorts every day.” SBF, then worth maybe $20 billion and, it turns out, a fan of “Moneyball,” unloaded his story. “He was gasping the whole time and talking a mile a minute.” Mr. Lewis realized, “I had my character.”

After Mr. Lewis arrived in the Bahamas in early February 2022, SBF apologetically announced that plans had changed. Then the entourage got on a jet to the Super Bowl in Los Angeles. This was the Crypto Ad Bowl—Mr. Lewis says FTX paid Larry David $10 million—and though no one quite knew it yet, crypto prices would soon implode.

It was brunch with Shaq and then, Mr. Lewis recalls with amazement, an “exclusive party with Hillary, Leonardo, Chris Rock, four Kardashians, Katy Perry, Jeff Bezos, the owners of the Rams and Cowboys.” SBF was dressed in his crumpled T-shirt and shorts. “By the end of the evening, all anyone wanted to talk to was Sam”—a benefit of throwing money around.

All in, Mr. Lewis spent more than 70 days in the Bahamas on a dozen different trips. That’s commitment. Plus journeys with SBF to Washington to wave cash at political celebrities. Along the way, FTX and its sister company Alameda—to which many investors unknowingly sent wire transfers thinking it was FTX—allegedly invested customer funds as their own, often taking out loans backed by hot-air-inflated crypto coins.

Mr. Lewis had all access. “I would stay in spare bedrooms, so I had codes to every room including the penthouse” where the FTX “effective altruism” believers stayed. Mr. Lewis told me that SBF didn’t sleep well and often needed others nearby—maybe the reason for the famous beanbag chair by his desk. He was incredibly disorganized, would pull all-nighters, and didn’t have a chief risk officer, CFO, or even an org chart. A company psychiatrist assembled a version of the latter—look for it inside the cover of the book—simply to understand who worked for whom. SBF has never seen it.

“In a previous life,” Mr. Lewis says, FTX employees “would have been socially awkward high-school math and physics teachers.” Visits to the penthouse at 2 a.m. would reveal chess matches rather than raging parties.

In November 2022, Mr. Lewis sought advice on his story from a famous Hollywood producer who told him, “It’s great but not a movie. You have a third act problem.” There was no real ending. Within days FTX and Alameda collapsed and filed for Chapter 11 bankruptcy. Gone were almost $9 billion of those customer assets they had used to buy other things with. Fraud? SBF over his head? Stupidity? Probably all the above.

I asked Mr. Lewis what went through his head when FTX imploded. “This is horrible. This is true. Oh my god, I have my third act.” Mr. Lewis spent several more weeks in the Bahamas, “mostly with Sam and his parents and the psychiatrist.” With all the room codes, he explored. “It was like the aftermath of Pompeii. Clothes and belongings left behind, frozen in time. Many headed to the airport leaving company cars with the keys inside at the curb.”

SBF was eventually extradited to the U.S., where prosecutors let him spend house arrest at his parents’ home in Palo Alto. That turned out to be a huge favor to Mr. Lewis, who spent eight to 10 hours there most weekends until a judge revoked bail. “Nothing he said was untrue,” Mr. Lewis says of his time with SBF. “If you asked him the right question, you got the answer,” although often as a strange word salad.

SBF was so disorganized that Mr. Lewis says most top FTX employees he interviewed tell him they can’t wait to read the book to find out what actually happened to FTX. His trial starts Tuesday. I wonder if jurors will be allowed to read it—especially about how a crumpled SBF, for a brief moment, outshone four Kardashians.

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Source: The Rise and Fall of SBF – WSJ