Sam Bankman-Fried’s Finger-Pointing Game Continues in Prison While Subsisting on Beans & Rice

Sam Bankman-Fried (SBF), once celebrated as a prodigy in the cryptocurrency realm and former CEO of FTX, now finds himself trading penthouses for a prison dormitory.

With a 25-year sentence looming for his involvement in a multi-billion dollar fraud at FTX, SBF confronts a stark contrast from his former life of opulence.

In a recent interview, facilitated by his mother Barbara Fried, conducted by Puck News' William D Cohan within the confines of the Metropolitan Detention Centre (MDC) Brooklyn, SBF's new reality unfolds.

The days of extravagant meals and tailored suits are replaced by a stark existence.

This marks his inaugural comprehensive interview since his incarceration began and Cohan explained:

"We talked for the next 75 minutes or so, the first in-person interview he has given to a journalist since he was locked up in the MDC last August and then subsequently convicted of two counts of wire fraud, conspiracy to commit wire fraud, securities fraud, commodities fraud, and money-laundering at his federal trial in November."

SBF's Guide to Surviving Prison

The once-celebrated founder of FTX and co-founder of Alameda Research, now incarcerated following convictions for wire fraud, money laundering, and conspiracy, has adapted to a new economic ecosystem within the MDC in Brooklyn.

Despite his circumstances, he reports a sense of safety and absence of abuse.

In the interview with Cohan, he detailed his survival tactics, shedding light on the realities of life behind bars.

Alongside 35 fellow inmates, the 32-year-old former crypto tycoon relies on a diet mainly composed of rice and beans obtained from the prison commissary, where bartering skills hold significant value.

Notably, his rice has evolved into a form of currency within the facility.

Cohan elaborated:

"He was sustaining himself on rice and beans, he said, because the prison food was unsurprisingly inedible, especially the vegan entrées he was served, which his fellow inmates thought literally smelled like shit. He wasn't complaining, mind you; he noted that he was just trying to make the best of a bad situation. The rice he buys at the prison commissary has become one of the currencies of the realm inside MDC."

During the interview, Cohan faced strict limitations, devoid of basic tools like a pen, pad, recorder, phone, or watch.

Consequently, he recorded his observations afterward:

"Following about an hour of bureaucratic snafus (I went to the wrong building at first, and I wasn't wearing dark pants—although an exception was made for me) and other forms of prison processing (shoes and belt off, metal detection, sticking my hand in a scanner) I was finally allowed inside the prison, without a phone, a watch, a recording device, or even a pad of paper and a pencil."

Based on Cohan's assessment, SBF has shed approximately 25 pounds and seems to be in improved physical condition.

Cohan also assessed SBF's appearance:

"After a few minutes of waiting, I looked up to see Sam Bankman-Fried, over in the corner, dressed head to toe in a chocolate-brown prison jumpsuit, along with the still-wild frizzy hair that has been his trademark. These days, Sam looks considerably thinner than the last time we met—it appeared he’d lost 25 pounds, at least. But he looked better and fitter than I thought he would, to be honest—less pudgy, less manic, less fidgety, no bags under his eyes."

SBF attributes this transformation in part to the unpalatable vegan food provided in the facility, which he and his fellow inmates have described as having a repugnant odor.

Housed with Murderers, Faced with Extreme Boredom but Still Pointing Fingers

Rather than expressing remorse for the mishandling of the $8 billion in customer funds that led to his conviction, SBF pointed to a blend of adverse market conditions and shifts blame to the legal advisors he entrusted with FTX, terming it "poor legal advice" and holding them accountable for the company's collapse.

Cohan iterated on SBF's regret:

"He also said he should have ignored the lawyers and just kept running both FTX and Alameda, conflicts be damned, sort of like how Elon Musk oversees his various companies. Wishing he had ignored his lawyers' advice emerged as a theme of Sam's during our visit."

According to his account, the company's downfall unfolded as a tragic outcome of a liquidity crisis, compounded by a bank run and maneuvers by rival firms.

SBF contends that he was unjustly singled out as the scapegoat for FTX's downfall, attributing the situation to negligence that left the company susceptible to challenges like a bank run and competitive pressures.

He firmly asserts his belief that FTX could have been salvaged had he retained leadership.

Furthermore, the interview hints at SBF implicating Caroline Ellison, his former romantic partner and co-conspirator at Alameda Research.

He suggests he reluctantly appointed her to a leadership role due to pressure from legal advisors concerned about potential conflicts of interest.

However, he maintains that he was unaware of any illicit activities occurring under her watch.

Cohan noted:

"We did discuss his onetime girlfriend, Caroline Ellison, whom he selected to run Alameda after lawyers kept hounding him about the inherent conflicts in him running both FTX and the hedge fund. (He chose to run FTX.) He acknowledged that he had asked a few other people if they would be interested in the role, but they turned him down. Ellison, he said, was a good manager of people and a good administrator but didn’t like making big investments and didn't like taking risks. (Obviously, this seems like a bizarre aversion for a hedge fund manager, but I didn’t belabor the point.) In any event, Alameda ended up doing both. He regretted that he had not tried harder to find another executive.”

He advocates for civil penalties rather than criminal charges, arguing that this would be a more appropriate recourse.

All in all, despite his conviction, SBF staunchly maintains his innocence, viewing himself as a victim who was not afforded sufficient opportunities to negotiate with prosecutors.

Cohan observed that:

"I got the distinct impression that Sam still doesn’t believe he committed any crimes, only that he was the one responsible for putting FTX in a position where it was vulnerable to a bank run and the devious actions of its competitors, not unlike how both Bear Stearns and Lehman Brothers failed in 2008…During our chat, Sam was contrite and certainly chastened, but not exactly apologetic: He was adamant about his innocence, aside from a few degrees of negligence—punishable, in his view, perhaps by civil consequences, not criminal penalties and a quarter-century sentence."

When queried about the prisoners he is housed with, SBF estimated that roughly half of the other 35 men in his unit had been convicted of murder and had agreed to cooperate with prosecutors in exchange for leniency, avoiding a life sentence.

He also described his living conditions in a section primarily designated for incarcerated women, except for the dormitory-style arrangement he shares with 35 other men in a large open space.

The setup includes bunk beds, minimal privacy, and a backdrop of extreme monotony, with four television sets broadcasting ESPN, Telemundo, BET, and a news channel.

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SBF mentioned the possibility of persuading his fellow inmates to alter the channel lineup, but he admitted to finding television uninteresting and opted not to pursue the endeavour.

Instead, he prefers a limited selection of movies or occasionally engages in subpar video games provided by the prison on a tablet, which lacks internet access.

SBF Intends to Appeal & Clears His Name

SBF is mounting a robust defense against his conviction.

Despite the daunting 25-year prison sentence, he and his legal team are gearing up for an appeal, contesting that the conviction stemmed from incomplete information and a hasty bankruptcy procedure.

Specifically, they accuse Sullivan & Cromwell, FTX’s former legal advisors, of exerting undue influence and unfairly singling out SBF.

Cohan noted:

"Sam told me that had he not been persuaded by Sullivan & Cromwell and then by his personal attorneys to relinquish his job as C.E.O. to Ray, the company would not have filed for bankruptcy, and it would still be a thriving enterprise, worth $80 billion now. In this alternate reality, he would be worth $40 billion and he certainly wouldn't be at the MDC."

SBF engages in regular discussions with his new attorney, dedicating about an hour each weekday as they strategise for his upcoming appeal.

With the filing expected this fall, he remains steadfast in his pursuit of justice and is resolute in his quest to vindicate himself.

While he remains determined to appeal, many observers question the likelihood of success given the challenging circumstances.

On the day of the interview, Sullivan & Cromwell, the legal counsel for the debtor-in-possession in FTX’s bankruptcy case, submitted an initial version of a reorganisation plan.

This plan seemingly aims to fully reimburse customers and creditors, potentially even exceeding their initial claims by $15 billion on $12 billion of claims, largely influenced by SBF's investments through Alameda.

However, this plan is in its early stages and must undergo significant scrutiny before approval.

Notably, the plan includes provisions for Sullivan & Cromwell and other FTX advisors to be shielded from future legal actions related to their involvement in the case.

Solana's Recovery Following SBF's Conviction

Even amidst adversity, some leading cryptocurrencies have defied expectations with remarkable recoveries.

Take the case of the Solana blockchain, for instance, which faced substantial challenges following FTX's downfall but has since undergone a remarkable transformation.

Austin Federa, head of strategy at the Solana Foundation, revealed that venture-capital firms avoided backing projects on Solana for nearly a year after FTX's demise.

Federa said:

"…there were a lot of questions about whether the Solana community and the Solana network would be able to survive and emerge from this strong, and there were a lot of people sort of sung the death song of the Solana ecosystem."

During this period, the Solana token experienced a sharp decline, shedding approximately 80% of its value within a mere two months post-FTX collapse.

SBF's previous investments in Solana, including his backing of the decentralised crypto exchange Serum on the blockchain, and his public support for the network, have firmly linked his name with Solana within the digital asset sphere.

Despite the tumultuous period following FTX's collapse, the Solana network exhibited remarkable resilience.

According to Federa, there was no mass exodus of projects from Solana to other blockchains post-FTX collapse, although some projects naturally ceased operations during the bear market.

Interestingly, SBF's endorsement of Solana appears to persist, as evidenced by reports that he allegedly encouraged prison guards to invest in the coin, as per a New York Times article in February.

The Solana token has demonstrated remarkable growth, boasting an impressive return of over 770% in the past year, surpassing both bitcoin and ether in performance.

Despite trading around $140 presently, marking a 29% deviation from its all-time high of $259 in November 2021, Solana maintains its position as the fifth-largest cryptocurrency by market capitalisation.

Notably, the total value locked on the Solana blockchain has surged, currently standing at over $4 billion.

This figure represents a significant uptick from the $220 million recorded at the beginning of 2023.

Although below its peak of $10 billion in November 2021, this substantial increase underscores Solana's growing traction and utilisation within the decentralised finance ecosystem.