It didn't take long for former crypto-billionaire Sam Bankman-Fried to learn the economic system of New York's Metropolitan Detention Center.
The disgraced founder of crypto exchange FTX has reportedly been keeping busy by swapping food items in exchange for services as he awaits sentencing on seven felony counts that include wire fraud and conspiracy to commit money laundering.
We now know that the new polished haircut he has been seen with in New York courtrooms is thanks to an inmate. On Thursday, the Wall Street Journal reported that SBF paid for a haircut with packaged mackerel, a type of pelagic fish that is a choice of currency among inmates.
It's no surprise that the former trader would quickly catch on to the commodity of choice in his new environment. He has been a professional trader for much of his career. In 2013, he got his first intern gig at Jane Street Capital, swapping exchange-traded funds before co-founding his crypto trading firm Alameda Research in 2017. A year later, he figured out how to arbitrage bitcoin between the US and Japanese markets.
The fish, popularly referred to as "macks" among inmates, has been the choice of currency in federal prisons since 2004, after cigarettes were banned, the Wall Street Journal previously reported.
Formerly incarcerated attorney Larry Levin accepted it as a form of payment from fellow prisoners he represented while serving his own sentence at the Lompoc correctional institution in California. He then used them to pay for personal upkeep services such as beard trims and shoe shines from inmates.
The trend became so popular that Global Source Marketing, a supplier of the fish, felt the increased demand, according to a 2008 story from the Journal.
There's economic logic behind the trend. Products that have steady value such as certain food items and stamps are used as a steady means of exchange to substitute for currency, which inmates cannot access. Food items like mack and tuna are stable commodities with a value that can be pegged to the dollar.
Bankman-Fried, who is set to be sentenced on March 28, 2024, faces up to 110 years in prison for the fraud charges brought against him, but it's only part of the charges he is facing. He is also set to stand trial for separate counts related to political bribery.
Source : Yahoo Finance / Nov 24, 2023