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 https://tinyurl.com/sbfhpwm This is a gift article; a subscription to WSJ is not required.
My understanding is they don't have access to Excel, or anyway to download market data. But couldn't they get hands on graph paper and use daily phone rations to get OHLC on several symbols, say from a friend? Then, if SBF was a real trader he could make some calls and barter those for deposits on his commissary account? If the calls are good he may also build cash accounts outside the prison system?
There are guys in prison who have done this, but it's not easy. And some prison systems try to prohibit this sort of thing. The policies are not consistent, even within each prison system, so, for example, the warden at one state prison in Wyoming may have different ideas or priorities than the warden at a different state prison, even within Wyoming. One may ignore this kind of activity while the other makes it a personal project to stamp it out. Almost every prison system in the USA has a policy which prohibits prisoners from "operating a business" while they are incarcerated. But some policies allow the warden to make an exception. Of course, many would argue that the activity in question is not a business in the traditional sense of the word, but rather a sophisticated form of investment. But prison systems have very wide latitude to interpret their own policies however they want. And the courts are reluctant to interfere unless there are very clear violations of the most basic constitutional rights. If you were to officially ask this question, i.e., ask a prison warden or the director of a state corrections agency whether prisoners can trade stocks or other securities, you would probably be told that the only appropriate way to do it is for the prisoner to communicate with his attorney, or possibly a nonlawyer who holds power of attorney (like a spouse or family member) to give instructions on what to do with funds in their own account. So, yes, to a certain extent prisoners have some right to direct the management of their personal financial affairs from behind bars. But calls, letters and e-mail to anyone other than an attorney can be monitored. If a prisoner was caught giving advice or recommendations to outsiders, and getting compensated for that advice, that could lead to trouble, and they could also try to confiscate the money that the prisoner received. With that begins said, yes, some prisoners do get away with this sort of thing, but it's not easy. In many systems deposits to the prisoner's account can only be made by a family member, an attorney, or a person who has been approved to visit the prisoner in person. So to get money from a third party into the prisoner's hands or into his control, they have to have a network on the outside that is willing to move the money through the right channels. If the amount of money is significant, then it can't be moved around without creating an electronic trail, and that exposes the people on the outside (e.g., spouse, attorney) and the money itself to some risk.
I don’t quite understand the fascination with a guy who was a second year delta1 ETF trader at Jane St. it’s literally a step above an intern. The Kimchi arb was a lie. He never made any money as the arb was persistent due to regulatory. It was a story told to hook the VCs. Alameda lost a billion in 2019-2020 at the peak of their arb. How’s that work? Alameda was allergic to money. 1) FTX was booking 0.5% per transaction. 2) Forward revs were parabolic so the dude stole thinking he could cover the theft with FTX comms n-months out. ‘Asking the wrong question…” was an admission of guilt to Singh or Wang, whoever testified about that conversation about the black hole in the balance sheet. 3) Bailing out the other opcos was no lose; they prop up shtcoins and immediately gain access to CUSTOMER DEPOSITS in furtherance of his theft. He was/is a fucking idiot.
Thanks for the detailed reply. It would indeed be good if one could somehow run his own account, or a family office account, and have the actions executed by a lawyer who wouldn't mind being paid with the calls. Those phone calls would be private? Or, it would be nice if a warden recognized the value of the calls and allowed one to advise a trustee with power of attorney, to execute calls in one's own account...in exchange for the fact that any warden can listen to any phone call and coat tail on the calls. There was once someone who gave a Ted Talk on how he learned to read and invest in the stock market from jail. However, what probably happened was he just read a lot of books on the stock market, and didn't really have a chance to take any actions till he got out. From a reliable source, i learned that inmates have been known to do deals on the outside utilizing trusted compatriots to move money around, on a phone they know can be listened to, and so, would just refrain from mentioning what the movement of funds is actually for. Apparently, there are drugs in prisons, for sale. My guess is this is facilitated by guards who have been bribed somehow to look the other way. If that were possible, maybe it would also be possible to motivate guards to facilitate trading calls.
I agree. Did not know that about the kimchi swap story. Never heard anything about Alameda turning any kind of profit through market making either. With almost a billion a year in revenue, yah, he had to be an idiot to get out over his skis with promotions and messing with shtcoins funded by customer deposits. All he had to do was find someone, or or crew of someones who could actually trade, and increased his revenue by 50% per year. No i don't think he was ever legit. So I don't really care how he decides to spend his time, i'm just asking for a friend who lives in a country where its getting easier and easier to become a political prisoner. It just seems to me this would be one way to make time fly a bit faster, having something to do while in, and a large account to come out to.
FTX didn’t have a triangular arb model, so there was no depth. They could have made another 50% in revs beyond comms if they had any sophistication. Dude couldn’t build a proper excel sheet. what is unbelievable is that the prosecution laid down on the “margin facility” nonsense. Prosecutors aren’t finance bros. Luckily the evidence was overwhelming.
Might have been Michael Santos. The guy did 25 years in federal prison for selling coke. He was sentenced at the height of the war on drugs, with stiff mandatory minimums. His crimes were all nonviolent. That being said, he has admitted that the drugs he sold certainly harmed many people, and that some people probably died from overdoses or from violent crimes committed by addicts who bought drugs from him or his downline. He didn't get filthy rich, but he directed some investments through his wife, and he managed to accumulate a decent nest egg while he was in prison. He made money behind bars in other ways, too. He went to prison at the age of 23 and got out at the age of 48. He earned two college degrees while in prison. He is now a very succesful coach and motivational speaker who advocates for prison reform. He has written several books. This one is a good starting point: https://www.barnesandnoble.com/w/inside-michael-g-santos/1100743155 Some of the story is a bit dated. Technology has changed things. When he was in prison, his connections to the outside were by phone and US mail. Today, almost all federal prisoners, and many state prisoners, have access to a closed e-mail system that can be monitored by corrections officers. And all the messages are saved for years. So even if they don't catch something in real time, they can look back whenever they want to. In many prisons, incoming US mail is now scanned, and the images are also saved for years. So in some ways, communication with the outside world has gotten faster and easier, but it is also easier for the authorities to read it. Only a couple chapters of the book deal with his investments. Most of the book describes other aspects of life in the US federal prison system. Still a fascinating story. @Good1 You think you might have to do some time? You gotta hire a prison consultant. And buy mackerel futures.
Why are you guys discussing how SBF could trade from prison?? Except a few months when they did arb trading (a no brainer if you have access to both markets) they were never profitable trading, they were a brokerage anyway. So his ability to trade from prison is irrelevant. Now playing WoW is another matter.