Michael Lewis's book on Sam Bankman-Fried slammed

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Michael Lewis's book on Sam Bankman-Fried slammed

Michael Lewis, a professor of history at Stanford University, has been accused of getting a lot of flack for his new book on Sam Bankman-Fried. In his defence, the one-time billionaire had very few critics during his dizzying rise to the top, except for his co-founder at Alameda Research.

In April 2018, she quit the management team, along with others on the management team.

In part, the decision was due to what she said were concerns over risk management and business ethics, as well as millions going missing at FTX's hedge fund arm.

In November, she said she had not spoken to her co-founder since 2018, and was speaking at X, formerly Twitter.

Lewis said Mac Aulay's stance on Bankman-Fried was unfounded.

She met with her colleagues at the Centre for Effective Altruism in Berkeley, California.

Effective altruism examines how to utilize resources you have to maximize the good you do. Bankman-Fried was one of her biggest supporters.

Bankman-Fried's early success of exploiting price inefficiencies - known as arbitrage - in crypto markets made Mac Aulay an immediate favorite among investors.

With about half a million dollars Bankman-Fried had left of his bonus at his former employer, Wall Street trading firm Jane Street.

Lewis said the two founders were able to persuade wealthy altruists to lend them $170 million to trade crypto within a few months.

In early 2018, Alameda faced problems, Lewis said.

Bankman-Fried asked for a lot from the 20 or so effective altruists he had hired.

The majority were in their twenties and only one had any financial experience. Lewis wrote: ''Like a man, I can write. ''

Alameda tried to do this through arbitrage, just as Mac Aulay had done, but on a much larger scale. The idea was to exploit price differences on crypto exchanges, most notably in Asia.

It wasn't easy working with Bankman-Fried, Mac Aulay, Mac Aulay's spokesman, said in a statement.

The majority of the team's time was spent reinforcing Bankman-Fried's insatiable desire to trade.

Ben West, who was a part of the five-person management team, told the New York Times.

Bankman-Fried reached a settlement regarding the use of his trading bot, which was able to arbitrage hundreds of different cryptocurrencies across multiple exchanges 24 hours a day.

He agreed he would only use it while watching the system as it traded as a fail-safe to halt any heavy losses. As the bot system traded unsupervised for hours, he fell asleep.

Lewis wrote in a letter to the Editor-in-Chief of the New York Times.

Bankman-Fried's total disregard for risk management led to the events that would lead to Mac Aulay's exit.

By early 2018, Alameda's finances were in a'state of chaos', Lewis said. It had lost millions of dollars, but its staff couldn't quantify how much.

Its trading system lost about $14 million dollars in February 2018, about half a million a day and'some additional millions had simply vanished,' Lewis wrote.

An Alameda employee discovered that four million dollars worth of the Ripple-affiliated XRP token, which traders used as a payment rail to book profits from an arbitrage trade on South Korean exchanges, had gone missing.

Bankman-Fried was not worried, he was sure it would turn up somewhere.

The management team didn't believe they were being instructed, and Alameda stopped trading for two weeks as they tried to locate the money. But they still couldn't find the $4 million they were looking for.

Will my company be impacted by a missed 10% of our transactions? Mac Aulay asked why Mac couldn't afford to buy a laptop.

Mac Aulay and the entire management team and half the employees left Alameda on April 9, 2018, according to the company's website. They received at least $1 million and $2 million in severance pay, Lewis said.

But Mac Aulay said that it was '100 small things' Bankman-Fried had done wrong that drove them to leave.

Mac Aulay founded Lantern Ventures, a trading firm with around $400 million in assets under management. Several former employees of Alameda have joined the company, she said.

Lantern Ventures was started to do things differently, she said in November.

The London-based Markets Correspondent, Adam Morgan McCarthy, is employed by DL News.