Michael Lewis is wrong about the "profitability" of FTX US and FTX Trading

It is kind of hard to understand why the expert financial shenanigans guy on the inside did not look at the audited financial statements Bankman-Fried touted to everyone else.

So much has already been said about the Michael Lewis book about FTX and SBF that I won’t repeat it here. Suffice to say that most financial journalists are incredulous that Lewis is giving Sam Bankman-Fried the benefit of the doubt.

I wrote about it on LinkedIn when I found out Lewis was punching down on Zeke Faux about his criticism of the book:

Other journalists have questioned whether Mr. Lewis’s relationship with Mr. Bankman-Fried was too friendly. In a new book about the crypto bubble, Zeke Faux, a Bloomberg investigative reporter, recounts watching Mr. Lewis “fawning” over Mr. Bankman-Fried during an onstage interview at the Crypto Bahamas conference in 2022. (Reviewers, including at this paper, have compared the two books, giving the advantage to Mr. Faux.)

When I mentioned this anecdote over lunch, Mr. Lewis leaned forward. “Here you have a person who’s written a book, and he’s trying to torpedo a rival book before it comes out?” he said. “That’s shocking. Talk about corrupt! So who do I think is more skeevy, Sam or him? I’d have to think about that.” (“He’s a friend of yours, right?” Mr. Lewis added. Indeed, Mr. Faux and I have known each other since summer camp.)

Please join me at the Pen & Pencil Club in Philadelphia on November 15 when I’ll talk to Zeke Faux, an investigative reporter for Bloomberg Businessweek and Bloomberg News and a winner of the Gerald Loeb Award and the American Bar Association’s Silver Gavel Award and a National Magazine Award finalist, about his book Number Go Up.

In the newsletter from The Revolving Door Project on Substack, Henry Burke writes:

On a big press tour for his latest book – focused on none other than Sam Bankman-Fried (SBF)– Lewis has spent the past week throwing out patently absurd defenses of the FTX founder to any reporter willing to listen. Lewis’ defenses include pretending SBF was just a child (he’s 31 years old, two years older than Joe Biden when he was elected to the US Senate) insinuating vague conspiracies that “the alleged crime kinda makes no sense,” and pushing SBF’s stale PR that he was trying to do everything in his power to stop Donald Trump (FTX leaders, including SBF, donated almost $24 million to Republicans in 2022 alone). Most comical of them all, however, is Lewis’ insistence that Bankman–Fried’s scheme was nothing like the fraud of famous Ponzi schemer Bernie Madoff. 

Lewis uses two arguments to differentiate the crimes of Bankman-Fried from Madoff: that SBF’s crimes would never have been an issue were it not for a loss of consumer confidence and that SBF operated a profitable business separate from the one which he used to commit his crimes. Lewis is, of course, being astoundingly stupid here. 

Henry links to several interviews Lewis has given where he says, but for the “bank run” on FTX, SBF had a profitable business with $1 billion in revenue, “it was real.”

Ummmmm, no.