The cryptocurrency industry continues to be plagued by an unending series of scandals. First it was FTX founder Sam Bankman-Fried, now it’s Changpeng Zhao of Binance. Zhao, popularly known as CZ, pleaded guilty to to a felony related to his failure to prevent money laundering on the platform and resigned as Binance CEO.
This development follows the high-profile conviction of FTX founder Sam Bankman-Fried, who was found guilty of defrauding billions from customers, and the collapse of several smaller crypto firms, resulting in substantial losses for investors.
Meanwhile, Sam Bankman-Fried, who is lodged in a New York jail, has adapted to a new form of currency in prison: mackerel. Currently detained at the Metropolitan Detention Center in Brooklyn, Bankman-Fried is awaiting sentencing for seven felony charges. His new environment is a stark contrast to his previous lavish lifestyle, including a $30 million penthouse in the Bahamas. In prison, he shares a dormitory with notable inmates like a former Honduran president facing trial and a convicted former top official from Mexico.
According to a Wall Street Journal report, in the absence of cigarettes, which were banned, mackerel has become a popular currency among inmates. Bankman-Fried has engaged in this unique economy, trading mackerel pouches for services, including a haircut to trim his signature moptop before his trial.
Bankman-Fried’s bail was revoked in August after a judge found probable cause for witness intimidation, a claim he denies. He was swiftly convicted of charges including stealing billions from FTX customers and defrauding investors. His sentencing is scheduled for March 28, after which he will be transferred to a federal prison.
While in detention, Bankman-Fried has access to a specialized laptop for legal review and shares a computer room with other inmates. Despite his changed circumstances, he has reportedly offered cryptocurrency advice to guards, the WSJ report said.
The Federal Bureau of Prisons has declined to comment on individual cases, citing privacy and security. However, they emphasize their commitment to maintaining a safe and humane environment for inmates.
Mark Botnick, Bankman-Fried’s spokesman, commented, “Sam’s doing the best he can under the circumstances.” Despite expressing regret over poor risk management at FTX during his trial, Bankman-Fried maintains his innocence regarding fraud. His legal team plans to appeal the conviction, which could result in a lengthy prison sentence.
Bill Baroni, a prison consultant and lawyer previously involved in the Bridgegate scandal, told WSJ that Bankman-Fried’s conditions will likely improve once he is transferred to a federal prison, with more freedom and access to programs.
Bankman-Fried initially struggled with the jail’s lack of vegan options and proper medication for his ADHD but now receives vegetarian meals. Inmates typically stay confined to their units, with meals delivered directly to them. The commissary offers various items, including mackerel fillets, now a staple of the prison economy, the WSJ report said.
Baroni humorously remarks, “The mack currency system is far more stable than crypto,” highlighting the unique adaptation of inmates like Bankman-Fried to their new environment.
(With inputs from agencies)
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