Olivia: What if the villain at the center of one of the biggest financial scandals of our time wasn't a villain at all? What if he was just… catastrophically bad at his job? Jackson: That's a dangerous question to ask, Olivia, especially when billions of dollars of customer money have just vanished into thin air. But it's exactly the puzzle at the center of Michael Lewis's book, Going Infinite: The Rise and Fall of a New Tycoon. Olivia: Exactly. And Lewis, the master storyteller behind modern classics like The Big Short and Moneyball, had this unprecedented, almost unsettling level of access to Sam Bankman-Fried, or SBF. He was actually with him in the Bahamas, in the penthouse, as the entire crypto empire was collapsing around them. Jackson: Which has become incredibly controversial. The book has a really mixed reception. While it's a bestseller and praised for its storytelling, many critics feel Lewis got too close, that he was charmed by SBF's narrative just like everyone else. And that's what makes this so fascinating to unpack. Olivia: It really is. The core of our podcast today is really an exploration of how a powerful narrative—in this case, the story of a brilliant, altruistic wunderkind—can mask a deeply flawed and chaotic reality, leading to one of the most spectacular financial collapses in history. Jackson: So today we'll dive deep into this from three perspectives. First, we'll explore the SBF Paradox—the philosopher-king persona that mesmerized the world. Then, we'll discuss the Empire of Chaos, looking at how FTX was actually run. And finally, we'll tackle the big, controversial question: was this a story of incompetence or grand deception?

Olivia: To understand how this all happened, you have to start with the man himself. When Michael Lewis first meets SBF, it’s not in some slick Wall Street office. He’s in Berkeley, and SBF shows up in cargo shorts, a wrinkled t-shirt, and New Balance sneakers, with this wild, untamed hair. Jackson: The classic tech genius uniform. It's almost a cliché at this point. Olivia: It is, but SBF took it to another level. During their walk, Lewis asks him how much it would take to sell his company, FTX. And after a long pause, SBF says, "One hundred and fifty billion dollars." But then he adds that what he really has use for is "infinity dollars." Jackson: Infinity dollars. Wow. That’s not a number, that’s a concept. What did he even mean by that? Olivia: This is the core of the SBF paradox. He claimed he needed the money to solve humanity's biggest existential risks—preventing the next pandemic, stopping nuclear war, managing the threat of rogue AI. This was his whole philosophy, something called "effective altruism." Jackson: Okay, hold on. Let's break that down. 'Effective altruism.' It sounds noble, but isn't it also the most perfect, unfalsifiable excuse for getting insanely rich? 'I'm not greedy, I'm saving the world!' It’s a bulletproof shield against any criticism of wealth accumulation. Olivia: That's the cynical take, and it's a valid one. But what Lewis shows is how genuinely appealing this philosophy was to a very specific type of person: hyper-rational, quantitative thinkers who were raised on logic and data. SBF's parents were both Stanford law professors, and he grew up questioning everything, from Santa Claus to the value of English class. He believed in math, in expected value calculations. Jackson: So he's applying a mathematical formula to morality? Olivia: Precisely. The idea, pushed by philosophers like Will MacAskill who heavily influenced Sam, was 'earning to give.' If you're a brilliant trader, you could do more good for the world by making billions and donating it to save lives than by becoming a doctor in a poor country yourself. You could fund a thousand doctors. Jackson: I can see the cold logic in that. But it also feels completely detached from human reality. Olivia: Completely. And that detachment was his signature move. Natalie Tien, his head of PR, tells this incredible story about his first TV appearance on Bloomberg. He's on camera, live, and he's actively playing a video game the entire time. Clicking away, his eyes darting between screens. Jackson: No way. And they just let that fly? Olivia: They loved it! It became his brand. He was the genius who was so smart his brain needed a side-quest just to stay occupied during a boring TV interview. He later had a Zoom meeting with Anna Wintour, the editor-in-chief of Vogue, about attending the Met Gala. He agreed to the meeting, but spent the entire call playing a game, barely looking up, just giving one-word answers. Jackson: He met with Anna Wintour while playing a video game? That's not just eccentric, that's deeply disrespectful. Olivia: He saw it differently. He later said he had "disdain for fashion" and the importance placed on physical appearance. For him, the Met Gala had a low 'expected value.' It was an inefficient use of time. But this very oddness, this rejection of social norms, was what made him so compelling. Venture capitalists, politicians, celebrities—they all bought into the story of the quirky, utilitarian genius who was too busy thinking about saving the world to care about combing his hair or making eye contact. Jackson: It's a powerful narrative. It makes you feel like you're in on the secret, that you're smart enough to see the genius behind the mess. But it also seems like the perfect cover for someone who just doesn't care about rules or other people. Olivia: And that's the perfect transition. Because while the world was captivated by this persona, the reality inside his companies was an entirely different story. It was an empire built on pure, unadulterated chaos.

Jackson: Alright, so he built this incredible persona of the philosopher-king. But what was actually happening inside the company? Because the stories from the book are just… wild. Olivia: Wild is an understatement. Imagine a multi-billion-dollar financial institution with no board of directors, no chief risk officer, no head of human resources. Job titles were actively discouraged. SBF wrote a memo saying titles "make people substantially worse at FTX." Jackson: So who was in charge of what? How did anything get done? Olivia: It was run on vibes. Proximity to Sam was the only real measure of power. The entire operation, both the exchange FTX and its sister trading firm Alameda Research, was run by a small group of his friends and housemates, many of whom were also effective altruists he'd met. Jackson: It sounds less like a company and more like a high-stakes, sleep-deprived college dorm where the currency is real customer deposits. Olivia: That's a perfect analogy. And the dysfunction was apparent early on. There's a story from 2018, at Alameda Research, before FTX even existed. They had built an automated trading system called 'Modelbot.' The management team was terrified of it, fearing it could lose all their money in an instant. But Sam was convinced it was genius. Jackson: Let me guess, he turned it on anyway. Olivia: He turned it on while everyone was asleep. And at the same time, they discovered that $4 million worth of a cryptocurrency called Ripple had just… vanished. It was gone. The team panicked and told Sam they had to stop all trading and find the money. Jackson: Which is the only sane thing to do. Olivia: Sam refused. He argued that the 'expected value' of continuing to trade was higher than the value of stopping to find the lost money. He even came up with this bizarre thought experiment to explain his thinking. He called it the 'Bob' problem. Jackson: The 'Bob' problem? Oh boy. Olivia: He said, imagine your friend Bob is at a murder scene. There's a tiny, one-in-a-million chance Bob is the murderer, but it's overwhelmingly likely he's innocent. How should you treat Bob? His point was that you can't be 100% certain of anything, so you have to assign probabilities and act on the most likely outcome. His colleagues were furious. They were like, "We're not talking about a hypothetical Bob! We're talking about four million real, missing dollars!" Jackson: That is completely unhinged. He's applying a philosophical brain teaser to a real-world crisis. It shows a fundamental disconnect from reality. Olivia: It does. And that disconnect was baked into the code of the company. The relationship between FTX, the exchange where customers deposited their money, and Alameda, his private trading firm, was the cardinal sin of finance. They were supposed to be separate. But in reality, they were completely intertwined. Jackson: How intertwined? Olivia: Lewis's book reveals that there was essentially a secret backdoor. A line of code, allegedly put in by Gary Wang, the CTO, that allowed Alameda to have a negative balance on FTX. It could borrow customer money from the exchange without limit, without collateral, and without triggering any of the automatic liquidations that would apply to any other user. Jackson: Wait. So Alameda could gamble with customer money, and if the bets went bad, there was no safety switch? That's not just chaos. That's the blueprint for a bomb. Olivia: It was the bomb. And for years, it worked, because the crypto market was going up. Alameda made billions, FTX grew into a behemoth, and Sam became the public face of crypto—the responsible adult in the room. He was testifying before Congress, pushing for regulation, and bailing out other failing crypto companies. Jackson: He was playing the role of the industry's savior while secretly running a casino with everyone else's chips. The audacity is breathtaking. Olivia: And it all held together, propped up by his powerful narrative. Until one day, the bomb finally went off. And that leads us to the billion-dollar question that Lewis seems to be wrestling with throughout the book.

Olivia: The collapse happened with stunning speed. It started with a leak of Alameda's balance sheet, which showed it was propped up by FTT, a token that FTX itself had invented. Then, rival exchange CEO CZ tweeted he was selling his FTT holdings, and it triggered a bank run. Jackson: And the bank, FTX, was empty. Olivia: Exactly. Customers tried to withdraw their money, and the money wasn't there. An $8 billion hole had opened up. And this is where the story gets really murky and the controversy around Lewis's book comes into focus. Jackson: Because Lewis seems to entertain the idea that SBF was genuinely clueless about this hole. Olivia: He does. SBF's explanation, which he gave to Lewis and others, was that it was a colossal accounting error. He claimed that when customers wired money to FTX, it went into an Alameda bank account—a detail he says he forgot about. So on the books, FTX credited the customer, but the actual cash was sitting with Alameda, which then traded it away. He described it as a poorly labeled account in a spreadsheet. Jackson: Come on. 'Oops, I forgot about an $8 billion hole in a spreadsheet'? That's not a thing. That is a lie. That defies every ounce of common sense. You don't 'accidentally' misplace a sum of money larger than the GDP of dozens of countries. Olivia: I agree it sounds unbelievable. And this is where many critics say Lewis was too credulous, too willing to accept the 'sloppy genius' narrative. But to play devil's advocate for a moment, and to channel what I think Lewis is exploring… Jackson: Go on. I'm curious to hear the defense for this. Olivia: Lewis isn't necessarily saying it's true. He's painting a psychological portrait of a person whose brain is so fundamentally different, so wired for abstract probabilities and not for concrete details or social rules, that it might be a plausible reality for him. Could a person who doesn't believe in job titles, who plays video games during meetings with world leaders, and who thinks in 'expected value' truly be that negligent about an $8 billion account? Lewis leaves the question open. Jackson: But there's so much evidence pointing the other way! The book itself details it. Constance Wang, one of his top executives, discovered that after years of service, she owned a tiny fraction of the company's equity compared to others. When she confronted Sam, he showed what she described as "zero empathy." He just couldn't understand why she was upset. He couldn't feel it. Olivia: And then there's the story from Caroline Ellison, the CEO of Alameda and his on-again, off-again girlfriend. As the company was collapsing, she wrote to Sam, "I just had an increasing dread of this day that was weighing on me for a long time and now that it’s actually happening it just feels great to get it over with." That doesn't sound like someone surprised by an accounting error. It sounds like someone who knew the whole thing was a house of cards. Jackson: Exactly! And the secret backdoor in the code that let Alameda borrow infinite money? That's not an accident. That's a deliberate choice. It's intent. To me, the 'incompetence' defense feels like the last, desperate narrative from a man whose stories have finally run out. Olivia: And that's the core tension. Lewis presents us with SBF's version of reality, a world of math and good intentions gone awry. But then he surrounds it with all these facts and stories from others that scream deception. He forces the reader into the jury box. Jackson: And for me, the verdict is pretty clear. But it does leave a huge, lingering question. After all this, what's the real lesson here?

Olivia: I think the deepest insight from Going Infinite isn't really about crypto regulation or financial fraud, though it's about those things too. I think Lewis is telling a timeless story about the seductive power of narrative. Jackson: What do you mean by that? Olivia: SBF's real product wasn't a crypto exchange. It was the story of Sam Bankman-Fried: the messy, brilliant, altruistic savior who was going to get rich to save humanity. And that story was so powerful, so perfectly tailored for our times, that it made the smartest people in the world—venture capitalists, regulators, journalists, maybe even Michael Lewis himself—willing to ignore the most gigantic, flashing red flags. Jackson: Because they wanted the story to be true. Olivia: They desperately wanted it to be true. The $8 billion hole wasn't just on a balance sheet; it was a hole in the story they had all bought into. And they kept pouring money and belief into it, hoping to patch it up. Jackson: That's a chilling thought. It means this isn't just an FTX story. It could happen anywhere a charismatic founder with a grand vision is given a blank check and zero oversight. It's about the danger of falling in love with a good story. Olivia: It really is. And it leaves you with a pretty profound question. What stories are we all buying into right now, in our own lives or in the market, that might have a similar, invisible hole in them? Jackson: That is something to think about. We'd love to hear your take on this. After hearing the details, do you think SBF was a brilliant but naive manager who got in over his head, or a calculating fraud from the start? Find us on our social channels and join the debate. Olivia: We're really curious to see where people land on this. It's a story that reveals as much about us as it does about him. Jackson: This is Aibrary, signing off.