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Sam Bankman-Fried’s Life Behind Bars: Crypto Tips and Paying With Fish

FTX founder learns that mackerel is a jailhouse currency and shares a dorm with other high-profile defendants

Mackerel packets, known as ’macks,’ are a favored federal jailhouse currency after officials banned smoking. PHOTO ILLUSTRATION: THE WALL STREET JOURNAL; PHOTO: BILL BARONI

By James Fanelli  and  Corinne Ramey - WSJ

November 23, 2023

Sam Bankman-Fried, convicted of fraud in the meltdown of FTX, has traded in crypto for a new currency: mackerel.

The fallen crypto king, who is cooling his heels at Brooklyn’s Metropolitan Detention Center while he awaits sentencing for seven felony offenses, has learned the fundamentals of prison economics while sharing a dormitory with a former Honduran president awaiting criminal trial and a recently convicted former top cop of Mexico, people familiar with the matter said.

Mackerel has replaced cigarettes as a favored federal jailhouse currency after officials banned smoking, and inmates sometimes use pouches of the preserved fish purchased in a commissary to pay for services from one another. Bankman-Fried traded some pouches of macks, as they are known, to a fellow inmate for a haircut of his signature moptop ahead of his trial, one of the people said. 

The FTX founder has been in jail since a federal judge revoked his bail in August after finding probable cause that he attempted to intimidate witnesses, a claim Bankman-Fried denied. Earlier this month, a jury took only a few hours to convict him on charges that he stole billions of dollars from FTX customers while defrauding investors and lenders. He is scheduled to be sentenced March 28, after which he will move to a federal prison to serve out his sentence.

The Brooklyn detention center is a far cry from the $30 million penthouse apartment in the Bahamas that Bankman-Fried once called home. 

FTX founder Sam Bankman-Fried was convicted earlier this month of stealing billions of dollars from customers of the doomed crypto exchange. PHOTO: JOHN LAMPARSKI/ZUMA PRESS

He is allowed non-attorney visitors once a week and has access to a specialized laptop that allows him to review legal material, the person familiar with the matter said. He and other inmates are allowed to use computers in a room that has desks separated by plastic dividers, according to the person. While Bankman-Fried’s days of investing billions of dollars in startups and trading digital tokens are behind him, he has been giving tips on crypto to guards, the person said.

A Federal Bureau of Prisons spokesman said the bureau couldn’t comment on the conditions for any individual in its custody for privacy and security reasons. The bureau makes every effort to ensure the safety of inmates while providing a secure and humane environment, he said.

“Sam’s doing the best he can under the circumstances,” Bankman-Fried’s spokesman, Mark Botnick, said.

At the trial, Bankman-Fried testified that while he regretted not having better risk-management at the crypto exchange, he didn’t commit fraud. His lawyers have said Bankman-Fried plans to appeal the conviction, which could lead to a decadeslong prison sentence.

Once Bankman-Fried is relocated to a federal prison to serve his sentence, he will likely have more freedom of movement, in addition to better access to educational programming and recreation, said prison consultant Bill Baroni, a lawyer who was convicted for his role in the New Jersey Bridgegate scandal, in which associates of former Gov. Chris Christie were accused of creating traffic jams for political retribution.

“When he is sentenced, his life will get better,” said Baroni, whose fraud conviction was subsequently thrown out by the Supreme Court. “He’ll be out of the facility with the most violent people.”

Other white-collar inmates have served time in facilities that are close to their families or offer more programming. Theranos founder Elizabeth Holmes, who was convicted of defrauding investors in the blood-testing company, is currently at the all-female, minimum-security prison camp in Bryan, Texas, located between Austin and Houston. 

The Brooklyn detention center has been criticized by defense lawyers and the union representing jail guards for poor conditions and being severely understaffed for years. The Federal Bureau of Prisons spokesman said that maintaining fully staffed institutions is a key priority for the bureau.

People familiar with the matter say Bankman-Fried’s unit mates include Genaro García Luna, Mexico’s former secretary of public security who was convicted earlier this year of helping the powerful Sinaloa cartel smuggle more than 50 tons of cocaine into the U.S. García Luna is awaiting sentencing.

Another unit inmate is former Honduras President Juan Orlando Hernández, who is awaiting trial on federal drug-trafficking and firearms charges. Hernández pleaded not guilty after being extradited to the U.S. in 2022. 

Hernández’s defense lawyer, Raymond Colon, said his client and Bankman-Fried have had cordial conversations with one another at the jail. Colon said staffing shortages can lead to canceled visiting hours, but Hernández generally doesn’t complain about the conditions. 

“It’s certainly not a hotel,” Colon said.

Bankman-Fried initially subsisted on peanut butter, bread and water because the jail wasn’t accommodating his vegan diet, one of his lawyers said in a court appearance in late August. He also had trouble getting his proper dosage of prescribed Adderall, the lawyer said. 

Brooklyn’s Metropolitan Detention Center, where Sam Bankman-Fried awaits sentencing for seven felony offenses. PHOTO: BRENDAN MCDERMID/REUTERS

His access to food and medication—which he takes for attention-deficit hyperactivity disorder—have since been resolved. He receives vegetarian meals at the jail, a person familiar with the matter said. 

Inmates at the detention center are typically confined to their unit, and don’t move freely around the facility. Instead of eating in a communal cafeteria, as at some prisons, meals are delivered to individual units, said Christine Dynan, a prison consultant who previously worked at the center and other federal facilities. 

Many inmates prefer to purchase food, as well as clothes and toiletries, through the Brooklyn jail’s commissary. A list of commissary items shows that peanut butter costs $4.15, a pair of sneakers are $79.95 and an MP3 player is $88.40. A pouch of mackerel fillets costs $1.30, up 30% from $1 in 2020.

Baroni, the prison consultant, said that when Bankman-Fried moves to a federal prison he will likely bring his mackerel packets with him. Baroni said he paid four macks for his own haircut while in prison.

“The mack currency system is far more stable than crypto,” he said.