- Michael Lewis defended FTX and its founder Sam Bankman-Fried on CBS’ 60 Minutes, sparking backlash from the crypto community.
- FTX faced allegations of misappropriating billions in customer funds, leading to its implosion last year.
- Questions arise about Lewis’ potential conflicts of interest and the accuracy of his portrayal of FTX’s financial health.
The renowned financial author, Michael Lewis, has stirred the crypto community by making some bold claims in defense of FTX, the bankrupt crypto exchange. His most recent book, “Going Infinite”, acts as a firsthand account of Sam Bankman-Fried’s rise and fall. Lewis’s appearance on CBS’ “60 Minutes”, has added another layer of intrigue to this saga.
FTX, once a crown jewel in the realm of cryptocurrency exchanges, faced its downfall in November of the previous year. The events leading up to its implosion involve the alleged misappropriation of billions of dollars under the guidance of its founder, Sam Bankman-Fried. With its roots traced back to 2019, FTX’s astounding growth seemed like a fairy tale success story.
In just one year, FTX’s revenue grew exponentially from $89 million to over $1 billion. However, beneath these impressive figures lay a more complicated financial situation. Prosecutors have pointed out that customer funds were mingled with assets from Alameda Research, a sister company to FTX. This resulted in an $8 billion shortfall of customer funds.
Michael Lewis Creates Controversy
In his statement, Lewis highlighted FTX’s ability to generate substantial cash flow, distinctly setting it apart from fraudulent operations like Ponzi schemes. He argued that if not for the distrust cast upon FTX’s operations, the company would still be prospering today.
Yet, not all share Lewis’s perspective. Critics argue that exchanges like FTX are mandated to maintain a 1:1 deposit ratio and that their business models should not emulate traditional banks. This sentiment was strongly echoed by crypto influencer Dan Held, who called out Lewis’s defense as “shameful”.
Questioning the Motives
Lewis’s staunch defense of FTX and Bankman-Fried raises questions about his motivations and potential biases. Reports have emerged that Lewis had an advisory role at FTX, prompting concerns about a conflict of interest. Furthermore, connections between FTX’s US unit and IEX, a stock exchange Lewis previously profiled, have fueled further speculation about his involvement.
To many in the crypto community, Lewis’s stance seems oddly out of character. For a writer celebrated for simplifying intricate financial deceits, his apparent oversight of FTX’s alleged shortcomings feels uncharacteristic.
As the legal proceedings unfold and Bankman-Fried’s trial commences, Michael Lewis’s position in this controversy will undoubtedly remain under scrutiny. Whether his defense of FTX stems from genuine belief or ulterior motives remains to be seen.