Going Infinite: The Rise and Fall of a New Tycoon

by Michael Lewis

Like Constance, I’d poke and prod and always come away with the sense that I’d learned less than I needed to know. But on that evening, Sam filled in one piece of this particular puzzle: FTX had lost a lot of money to hackers. To avoid encouraging other hackers, they’d kept their losses quiet. The biggest hacks occurred in March and April 2021. A lone trader had opened an account on FTX and cornered the market in two thinly traded tokens, BitMax and MobileCoin. His purchases drove up the prices of the two tokens wildly: the price of MobileCoin went from $2.50 to $54 in just a few weeks. This trader, who appeared to be operating from Turkey, had done what he had done not out of some special love for MobileCoin. He’d found a flaw in FTX’s risk management software. FTX allowed traders to borrow bitcoin and other easily sellable crypto against the value of their MobileCoin and BitMax holdings. The trader had inflated the value of MobileCoin and BitMax so that he might borrow actually valuable crypto against them from FTX. Once he had it he vanished, leaving FTX with a collapsing pile of tokens and a loss of $600 million worth of crypto.