Going Infinite: The Rise and Fall of a New Tycoon

by Michael Lewis

He needed infinity dollars because he planned to address the biggest existential risks to life on earth: nuclear war, pandemics far more deadly than Covid, artificial intelligence that turned on mankind and wiped us out, and so on. To the list of problems Sam hoped to tackle he’d recently added the assault on American democracy, which, if successful, would make all of the other big problems far less likely to be solved. One hundred fifty billion was about what was needed to make a dent in at least one of the big problems.

Sam explained that he was trying to decide whether to simply pay off the $9 billion Bahamas national debt himself, so the country could fix their roads and build schools and so on.

That first TV show Natalie watched from her own desk, but later, during future interviews, she’d walk around behind Sam to confirm that, yes, his eyes moved around so much because he was playing a video game. On live TV! Often, on live TV, Sam would not only play a video game but respond to messages, edit documents, and tweet. The TV interviewer would ask him a question and Sam would say, “Ahhhh, interesting question”—even though he never found any of the questions interesting. And Natalie knew he was just buying time to exit whatever game he was playing and reenter the conversation.

No one else had gotten richer faster except for Mark Zuckerberg,

The funny thing about these situations was that Sam never really meant to cause them, which in a way made them feel even more insulting. He didn’t mean to be rude. He didn’t mean to create chaos in other people’s lives. He was just moving through the world in the only way he knew how. The cost this implied for others simply never entered his calculations. With him it was never personal.

And she was clearly warming to him. Everyone did these days. When you had $22.5 billion, people really, really wanted to be your friend. They’d forgive you anything. Their desire freed you up from having to pay attention to them, which was good, because Sam had only so much attention to give.

Sam had agreed to pay Tom Brady $55 million, and his then-wife, Gisele Bündchen, another $19.8 million, for twenty hours of their time each,

CEOs had flown to the Bahamas under the mistaken impression that Sam had agreed to buy their companies. The World Economic Forum had to scramble to fill a stage and cancel media interviews after Sam decided, the night before he was meant to deliver a big speech in Davos, not to. Sam had failed to fly to Dubai to give the keynote at Time magazine’s party for the world’s 100 Most Influential People, even after Time had named him to their list and flattered him in print. “In a crypto landscape ridden with scams, hedonism, and greed, Bankman-Fried offers a kinder and more impactful vision brought forth by the nascent technology,” Time had written, the week before Sam stiffed them.

“There were some things I had to teach myself to do,” he said. “One is facial expressions. Like making sure I smile when I’m supposed to smile. Smiling was the biggest thing that I most weirdly couldn’t do.” Other people would say or do things to which he was meant to respond with some emotional display. And instead of faking it, he questioned the premise. What’s the whole point of facial expressions in the first place? If you’re going to say something to me, just say it. Why do I have to grin while you do it?

In elementary school he’d read the Harry Potter books over and over. By the eighth grade he had stopped reading books altogether. “You start to associate it with a negative feeling, and you stop liking it,” he said. “I started to associate books with a thing I didn’t like.” He kept his thoughts about the literary-industrial establishment to himself through middle school, but by high school they began to leak out of him. “I objected to the fundamental reality of the entire class,” said Sam of English. “All of a sudden I was being told I was wrong—about a thing it was impossible to be wrong about. The thing that offended me is that it wasn’t honest with itself. It was subjectivity framed as objectivity. All the grading was arbitrary. I don’t even know how you grade it. I disagreed with the implicit factual claims behind the things that got good grades.” He’d sat through middle school in a stupor, but by high school he was sure enough of his own mind that he was willing to challenge his English teachers’ cherished beliefs on grounds unrecognizable to English teachers. Their belief, for instance, that Shakespeare was an especially good writer.

The very first question on the final exam set him off. What’s the difference between art and entertainment? “It’s a bullshit distinction dreamed up by academics trying to justify the existence of their jobs,” wrote Sam, and handed the exam back.

He felt nothing in the presence of art. He found religion absurd. He thought both right-wing and left-wing political opinions kind of dumb, less a consequence of thought than of their holder’s tribal identity. He and his family ignored the rituals that punctuated most people’s existence. He didn’t even celebrate his own birthday. What gave pleasure and solace and a sense of belonging to others left Sam cold. When the Bankman-Frieds traveled to Europe, Sam realized that he was just staring at a lot of old buildings for no particular reason.

He might not have felt connections to individual people, but that only made it easier for him to consider the interests of humanity as a whole. “Not being super close to that many particular people made it more natural to care not about anyone in particular but about everyone,”

Sam thought time pressure favored him. It wasn’t that he thrived under pressure; it was that he didn’t feel it. He wasn’t better than usual when he was on a clock; he just wasn’t worse—and most people were.

The younger traders were full Homo sapiens. They’d been harvested from the tiny slice of the population identified early in life as having a gift for higher-order thinking. Many had gone to math camp in high school. Almost all had excelled in computer science or math at MIT, Harvard, Princeton, or Stanford. They were less socially adept than the older traders, because they could afford to be. Now that trading was done machine-to-machine, it mattered less how well traders negotiated with other people. What mattered was their ability to help the machine replace humans in financial markets—either directly, by writing code, or indirectly, by giving instructions that might be codified.

But there were limits to how socially off-putting a trader could be at Jane Street. Sam had tested them. After his summer internship, he’d set out to address his superiors’ criticisms. He’d long since realized that his inability to convey emotion created a distance between himself and others. Just because he didn’t feel the emotion didn’t mean he couldn’t convey it. He’d started with his facial expressions. He practiced forcing his mouth and eyes to move in ways they didn’t naturally. “It’s not totally trivial to fake things,” he said. “It was physically painful. It felt unnatural. And I wasn’t good at it. It didn’t look right.”

The constant hunt for statistical patterns in markets led to all sorts of strange insights. Every time Brazil won a World Cup match, the Brazilian stock market tanked, for instance, because the win was thought to increase the shot at reelection of Brazilian president Dilma Rousseff, perceived to be corrupt.

The firm enticed young people who at any other time in human history were unlikely to have found their way to Wall Street and kept them sufficiently interested and engaged and well paid that they couldn’t imagine doing anything else with their lives except trade for Jane Street. They turned math people into money people without any obvious loss in human happiness.

But the underlying purpose of the work would be entirely different, because she would be doing it only with other effective altruists. Jane Street, as Sam put it, was “just a place where people come to work each day to play some games and increase the number in their bank account, because what the fuck else are they going to do with their lives?” Alameda Research, as he was calling the new firm, was going to be different: a vessel to save some vast number of lives.

The flood of effective altruists into the firm was worrisome. These people arrived with their own value system. They had their own deep loyalties to something other than Jane Street. They didn’t have the usual Wall Street person’s relationship to money; they didn’t care about their bonuses in the ways Wall Street people were supposed to care. Sam Bankman-Fried had been able to leave his lucrative Jane Street job for a nutso plan to try to make even more money on his own because he had no material attachments. “It wasn’t going to cut into his lifestyle, because he didn’t have a lifestyle,” as one former Jane Street trader put it.

They were now all living in Sam’s world, and they weren’t hiding their unhappiness. “He was demanding and expecting everyone to work eighteen-hour days and give up anything like a normal life, while he would not show up for meetings, not shower for weeks, have a mess all around him with old food everywhere, and fall asleep at his desk,” said Tara Mac Aulay, a young Australian mathematician who was, in theory, running the company with Sam. “He did zero management and thought that if people had any questions, they should just ask him. Then in his one-on-ones with people, he’d play video games.”

His attitude toward the missing money was, Eh, it’ll probably turn up somewhere.

Modelbot was maybe the biggest point of disagreement between Sam and his management team. Sam’s Release-the-Kraken fantasy was to hit a button and let Modelbot burn and churn through crypto markets twenty-four hours a day, seven days a week. He had not been able to let Modelbot rip the way he’d liked—because just about every other human being inside Alameda Research was doing whatever they could to stop him. “It was entirely within the realm of possibility that we could lose all our money in an hour,” said one. One hundred seventy million dollars that might otherwise go to effective altruism could simply go poof. That thought terrified the other four effective altruists in charge of Alameda Research. One evening, Tara argued heatedly with Sam until he caved and agreed to what she thought was a reasonable compromise: he could turn on Modelbot so long as he and at least one other person were present to watch it, but should turn it off if it started losing money. “I said, ‘Okay, I’m going home to go to sleep,’ and as soon as I left, Sam turned it on and fell asleep,” recalled Tara. From that moment the entire management team gave up on ever trusting Sam.

It occurred to Nishad that the effective altruist’s relationship to money was more than a little bizarre. Basically all of Alameda Research’s employees and investors were committed to giving all their money away to roughly the same charitable causes. You might surmise that they wouldn’t much care who wound up with the money, as it all would go to saving the lives of the same people none of them would ever meet. You would be wrong: in their financial dealings with each other, the effective altruists were more ruthless than Russian oligarchs. Their investors were charging them a rate of interest of 50 percent. “It wasn’t a normal loan,” said Nishad. “It was a shark loan.” In what was meant to be a collaborative enterprise, Sam had refused to share any equity with anyone. And now all these unprofitable effective altruists were demanding to be paid millions to quit—and doing whatever they could to trash Sam’s reputation with the outside world until they got their money. “It felt super weird,” said Nishad. “It felt wild for money to be the object of our focus rather than something else. I thought caring about money itself was morally bankrupt.”

As it turned out, the people who set out to eliminate financial intermediaries simply created some new ones of their own, including, by early 2019, two hundred fifty-four crypto exchanges. These early crypto exchange founders weren’t typically financial experts. They were a grab bag of technologists and libertarians and idealists and high plains drifters, like Zane. Even more than, say, the New York Stock Exchange, the institutions they created required their customers to trust them. The New York Stock Exchange had regulators. If the New York Stock Exchange stole all your money, its executives would be sent to jail. In any case, the New York Stock Exchange would find it hard to steal all your money, as you didn’t keep your money on the New York Stock Exchange but in a brokerage account, managed by a bank, overseen by other regulators. The new crypto exchanges had no regulators. They acted as both exchange and custodian: they didn’t just enable you to buy bitcoin but also housed the bitcoin you’d bought. The whole thing was odd: these people joined together by their fear of trust erected a parallel financial system that required more trust from its users than did the traditional financial system.

In traditional finance, founded on principles of trust, no one really had to trust anyone. In crypto finance, founded on a principle of mistrust, people trusted total strangers with vast sums of money.

How did everyone’s actions reflect on the probability distribution of their future behavior. The sentence told you a lot about how Sam viewed other people, and maybe himself too. Not as fixed characters—good or bad, honest or false, brave or cowardly—but as a probability distribution around some mean.

He didn’t think of himself as frightening. He didn’t intend to intimidate. But he wasn’t going to change human nature, and so he decided that, going forward, he would bury any negative reactions he had to anything anyone said or did. He would give human beings with whom he interacted the impression that he was far more interested in whatever they were saying or doing than he actually was. He’d agree with them, even if he didn’t. Whatever idiocy came from them, he’d reply with a Yuuuuuuppp! “It comes with a cost, but it’s on balance worth it,” he said. “In most ways, people like you more if you agree with them.” He went from being a person you’d be surprised to learn approves of you to a person you’d be surprised to learn that, actually no, he doesn’t.

In their single-minded quest to maximize the utility of their lives, they were seeking to minimize the effect of their feelings. “The way they put it to me is that their emotions are getting in the way of their ability to reduce their decisions to just numbers,” said George. “They’d ask: Should I have an affair? Well, let’s run the cost-benefit analysis. EAs love that approach.”

As a group, they were as likely to want to talk about their philosophy as they were their personal issues, and these philosophical discussions were more entertaining to George than anyone’s issues. But George heard about the issues, too, and this allowed him to detect patterns in his new patients’ behavior. For example, they all professed to care about “humanity,” while at the same time often being a bit slow to love actual people. “It doesn’t really start with people,” said George. “It starts with suffering. It’s about preventing suffering. They care about animals in the same way. They also care about not having the earth blown up by an asteroid. But it’s not a longing for a connection.”

the immortal words texted by Binance’s chief compliance officer to a colleague in 2018: “we are operating as a fking unlicensed securities exchange in the USA bro.” (This and other similar morsels turned up in a lawsuit filed by the SEC against Binance five years after the fact, in June 2023.)

Delightful

If countries did not yet have the laws, a small army of FTX lawyers would help them to create them. In the country that mattered most—the one country whose financial regulators chased people outside of their borders, and enforced its rules around the globe—Sam would personally take the lead. He’d set out to persuade the United States government to regulate crypto and punish those who violated the new rules, leaving FTX alone as a kind of teacher’s pet of crypto.

Sam was less surprised that Binance was wash trading than by how badly they were doing it. “They were doing a B-minus job at market manipulation,” he said. One Binance bot would make a wide market in Bitcoin futures, and another Binance bot would enter and lift its high offer. If, to keep the numbers simple, the fair value of bitcoin was $100, the first Binance bot would insert a bid at $98 and an offer at $102. No normal trader would trade against either—why sell for $98 or buy for $102 on Binance what you could buy or sell on some other exchange for $100? But then, at regular and predictable intervals, the second Binance bot would enter the market and buy at $102. It looked as if a trade had occurred between two different parties, but it hadn’t. It was simply Binance buying from Binance. Sam loved this sort of thing: it was Jane Street trading all over again. In response, he had his traders at Alameda Research build their own, faster bots. Alameda’s bots inserted offers a tiny bit cheaper than the offers from Binance bots. The Binance bot would offer to sell a Bitcoin future at $102, and, moments before the second Binance bot showed up to buy, the Alameda bot would leap in and offer it at $101.95. Instead of buying bitcoin from itself at an inflated price, Binance was buying it from Alameda Research at a price nearly as high.

“It’s unclear if we even have to have an actual board of directors,” said Sam, “but we get suspicious glances if we don’t have one, so we have something with three people on it.” When he said this to me, right after his Twitter meeting, he admitted he couldn’t recall the names of the other two people. “I knew who they were three months ago,” he said. “It might have changed. The main job requirement is they don’t mind DocuSigning at three a.m. DocuSigning is the main job.”

The US government exerted massive influence on virtually everything under the sun and maybe even a few things over it. In a single four-year term, a president, working with Congress, directed roughly $15 trillion in spending. And yet in 2016, the sum total of spending by all candidates on races for the presidency and Congress came to a mere $6.5 billion. “It just seems like there isn’t enough money in politics,” said Sam. “People are underdoing it. The weird thing is that Warren Buffett isn’t giving two billion dollars a year.”

One day some historian of effective altruism will marvel at how easily it transformed itself. It turned its back on living people without bloodshed or even, really, much shouting. You might think that people who had sacrificed fame and fortune to save poor children in Africa would rebel at the idea of moving on from poor children in Africa to future children in another galaxy. They didn’t, not really—which tells you something about the role of ordinary human feeling in the movement. It didn’t matter. What mattered was the math. Effective altruism never got its emotional charge from the places that charged ordinary philanthropy. It was always fueled by a cool lust for the most logical way to lead a good life.

As she had also overseen the sales team, she knew most of the names on the list, especially the high-frequency traders. She knew that every one of them had been intensely suspicious about the relationship between FTX and Alameda Research. “Everyone cared about it,” said Constance. “It was literally the first thing I was asked every day. Is Alameda Research front-running us? Does Alameda Research get to see other people’s trades? Does Alameda get less latency?” In other words: Did Alameda enjoy the same unfair trading edge on FTX that the high-frequency traders enjoyed on Nasdaq and the New York Stock Exchange? Oddly enough, it had not. Instead, FTX had simply loaned Alameda all of the high-frequency traders’ deposits . . . for free!

Constance nevertheless sensed that he didn’t really register the damage he’d caused to other people in the way that, say, she might have. “He has absolutely zero empathy,” she said. “That’s what I learned that I didn’t know. He can’t feel anything.”

Inevitably, word had got out that the effective altruists took a principled stand against monogamy. After that, a rumor spread that they spent half their time in the Orchid penthouse finding new ways to have sex with each other. Mostly what they had done with each other was play board games. In the heat of bughouse chess matches, they’d explored every possible combination and position; otherwise, not so much.

If the money was hard to find, it was in part because there was no person inside of FTX—at least no person Ray was willing to speak with—in charge of knowing where it all was. “There was no structure,” said Ray. “No list of employees.¶ No org chart.” Six days into his new job, Ray filed a report with the US Bankruptcy Court for the District of Delaware. “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,” he wrote.

Eventually, I figured, he’d find the $1 billion or so lost in hacks that Sam would have just told him about, if he’d been willing to talk to Sam.*

Gary had owned a piece of Alameda Research, but his stake in FTX was far more valuable. Nishad owned a big chunk of FTX and none of Alameda Research. Ditto Caroline, who ran Alameda Research but owned shares only in FTX. None of these people had any interest in moving money out of FTX into Alameda Research in a way that put FTX in jeopardy. Just the reverse: it might as well have been their money that was being moved.

Ninety percent of those accused of crimes by the US government in 2022 had accepted a deal and pleaded guilty. Less than half of 1 percent had been acquitted. Going to trial against the government felt a bit like playing an away game against an opponent that started with vast material and psychological advantages. Sam was hell-bent on going to trial—insisted that he was innocent of fraudulent intent. To persuade others of his innocence, however, he’d need to explain why his three closest colleagues were now willing to plead guilty. Why would anyone say they had committed a crime when they had not? Why did they seem themselves to believe they had committed a crime?

In the first seven months alone, the professional fees would top $200 million, with Sullivan & Cromwell the top fee earner, and they’d only just gotten started. A study made by one creditor projected that by the time they were done, the various advisors to the bankruptcy would have taken out a billion dollars.