Sam Bankman-Fried, often referred to online as SBF, convicted in the FTX meltdown, now explores an unexpected economy in Brooklyn’s Metropolitan Detention Center. Cooling his heels while awaiting sentencing, he delves into the world of prison economics, where mackerel replaces cigarettes as the preferred currency. SBF’s unique adaptation involves trading pouches of preserved fish, known as ‘macks,’ for services within the confines of the detention centre.
Metropolitan Detention Center, Brooklyn: The site where Sam Bankman-Fried awaits judgement for seven felony charges. (Source: Reuters)
Having traded billions in the crypto world, SBF finds himself in stark contrast to his former life, now offering crypto tips to guards. Despite restrictions, he adapts, utilising a specialised laptop for legal material review. As the sentencing date looms, he faces the potential of a lengthy prison term, with plans to appeal the conviction.
SBF, once residing in a lavish Bahamas penthouse, now navigates prison life with weekly non-attorney visits and insights into prison economics. While the Federal Bureau of Prisons refrains from commenting on individual conditions, SBF’s spokesperson, Mark Botnick, notes his resilient stance under challenging circumstances.
At the trial, he expressed remorse for lacking better risk management but denied fraud allegations. Post-sentencing, prison consultant Bill Baroni predicts improved conditions in a federal prison, offering better access to education and recreation, contrasting with the current environment.
SBF’s unit mates include notable figures like Genaro García Luna and former Honduras President Juan Orlando Hernández. Conversations among inmates provide a unique dynamic, offering solace in shared experiences. Despite criticisms of the Brooklyn detention centre, SBF and Hernández engage in cordial conversations, highlighting camaraderie amid challenging conditions.
SBF initially faced dietary challenges in the form of peanut butter, bread, and water due to vegan restrictions. Access to prescribed medication, crucial for attention-deficit hyperactivity disorder, posed initial hurdles. Fortunately, these issues have since been resolved, with SBF now receiving vegetarian meals tailored to his diet.
Inmates, confined to their units, rely on the detention centre’s commissary for purchases. A list of items reveals the pricing dynamics, with mackerel fillets now costing $1.30, up 30% from 2020. Baroni, the prison consultant, hints that SBF’s mackerel trade might continue in a federal prison, emphasising its stability compared to the crypto world.
Federal prisons adopt ‘macks,’ mackerel packets, as the new preferred currency post-smoking ban. (Source: The Wall Street Journal)
As SBF navigates this unusual chapter, the mackerel currency system provides a glimpse into his adaptability amid contrasting circumstances. From FTX to fish pouches, his journey unfolds in unexpected ways within the walls of the Metropolitan Detention Center.
Last year, SBF made headlines for his unexpectedly luxurious eight-day stay at Fox Hill Prison in the Bahamas. While other inmates endured harsh conditions, SBF enjoyed privileges like a separate bed, vegan meals, cable TV, and air conditioning. Despite the prison’s reputation for dire conditions, SBF’s comfortable stay raised eyebrows, contrasting starkly with the treatment of other prisoners.
The Bahamas Department of Correctional Services’ site, Fox Hill, located in Nassau. (Image Source: Bloomberg)
Video footage from 2022 reveals dire conditions at Fox Hill Prison. (Image Source: Reuters)
Do Kwon, creator of the failed algorithmic stablecoin TerraUSD, will remain in prison as Montenegro’s highest court rejects his appeal. Kwon, former CEO of Terraform Labs, received a four-month sentence for using a fake passport to flee to Dubai. Extradition considerations involve both his native South Korea and the U.S. Kwon faces a U.S. civil fraud lawsuit and criminal charges. Despite an Interpol red notice, he eluded authorities in Serbia and Montenegro. Kwon, denying fraud, continued running Terraform Labs remotely during his fugitive period. His bail deal fell through, and he is held in Spuž prison with limited daily outdoor access.
Faruk Fatih Özer
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Turkish crypto exchange Thodex’s former CEO, Faruk Fatih Özer, received an extraordinary 11,196-year prison sentence for allegedly swindling $2 billion from over 400,000 customers. His arrest in Albania followed Thodex’s abrupt shutdown in 2021, leaving users without access to their funds. Özer faced charges including fraud and money laundering, resulting in this unprecedented sentence, typical of Turkey’s legal system’s notable lengthy rulings.
Image Source: Bloomberg
Su Zhu, co-founder of collapsed crypto hedge fund Three Arrows Capital, was arrested in Singapore after a court order sentenced him to four months in jail for non-compliance in the fund’s liquidation. The arrest occurred as Zhu was trying to leave the country. The court-ordered confinement aims to facilitate engagement with Zhu regarding Three Arrows Capital during this period. The Monetary Authority of Singapore also barred Zhu and co-founder Kyle Davies from regulated investment activities in Singapore for nine years.
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Alex Mashinsky, the founder of bankrupt crypto lender Celsius, faces federal charges including fraud, securities, commodities, and wire fraud. Allegations state he misled customers about Celsius’s operations, depicted it as a bank when it functioned as a risky investment fund, and manipulated the price of Celsius’s token. The indictment also accuses Mashinsky of gaining $42 million and his associate $3.6 million from token sales. The SEC sued Mashinsky and Celsius, alleging misleading investors with unregistered crypto securities.
In recent news, Changpeng Zhao, former Binance CEO, faces a possible prison sentence of 18 months following his guilty plea to anti-money laundering violations in the US.
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His sentencing is scheduled for 23 February 2024, with a bail set at $175M. The violations could carry a maximum term of 10 years, but prosecutors are seeking an 18-month sentence, with a potential for harsher punishment.