We have adopted a specialist team approach to our practices for many years. We feel that this is the way our clients want us to work, and that specialisation leads to the provision of a better service.
Insights
29/10/2024
Something a little different in this contribution to the Chambers Fraud Blog – a book review of American financial journalist and author Michael Lewis’s ‘Going Infinite’, published in paperback in the UK in late September. It is a fascinating read telling the very much ‘inside’ story of the Icarus-like rapid rise and even faster descent of one time crypto-currency golden boy Sam Bankman-Fried, who less than 2 years ago was considered to be one of the world’s youngest self-made billionaires (he was then still in his late twenties), but who in March of this year was sentenced to 25 years’ imprisonment after being convicted of misappropriating 8 billion dollars from clients of his own crypto-currency exchange – known as FTX – where investors would exchange hard currency for digital coinage such as ‘Bitcoin’. Riding the crypto popularity wave, FTX’s valuation at one point was in excess of $30 billion, but in November 2022 it imploded virtually overnight, revealing a massive shortfall (in excess of $8 billion) in customer accounts.
Lewis’s book is a tour de force. Granted access to Bankman-Fried and his inner circle at FTX well before the business hit the proverbial buffers, he was acutely well-placed to witness at first hand the fall-out between the leading players involved as things went truly pear-shaped, and the book paints a vivid picture of the chaos that ensues as investors panic, customers attempt to withdraw their funds, and investigators move in.
Lewis weaves together a number of paradoxical themes, creating a twenty-first century morality tale that frequently reads like a thriller. Bankman-Fried is a larger than life but ultimately tragic figure, a socially awkward, mathematics wunderkind, who appears wholly uninterested in material enrichment or any kind of fame, but who nevertheless becomes ludicrously wealthy and is fawned over by the rich and famous. Having gained the admiration and trust of colleagues, investors and customers alike, he then cuts an increasingly isolated figure as those closest to him start to point the finger of blame, a number of them becoming prosecution witnesses as part of seemingly generous plea deals.
The book captures the frenzied energy of the ‘Crypto’ boom, where vast amounts of money were generated in a market where highly questionable and ultimately illegal trading practices were allowed to flourish. To Lewis, Bankman-Fried’s personality and motivation is far from straightforward, his initial good intentions (seeking to acquire vast wealth in order to better the planet in pursuit of a philosophy of ‘effective altruism’) becoming clouded by poor financial choices and a lack of moral clarity.
The narrative is fast paced, especially as it approaches FTX’s collapse, which plays out like a disaster movie, and those of us used to the slow workings of the financial authorities in the UK will be surprised, given the scale and complexity of the case, at how quickly the US legal system leaps into gear, bringing Bankman-Fried to trial in less than twelve months from the inception of the investigation. Ultimately the book is a cautionary tale about the dangers of financial innovation when it lacks regulatory oversight, proper accountability and any real form of transparency. The origins and development of the cryptocurrency market collide with financial fraud and the psychology of ambition and risk to provide a compelling read.
Sign up
To be kept up-to-date with our latest news and future events, please complete the short form.
A member of the clerking team will help you resolve your request.