By Rob Copeland
There’s a popular reggaeton phrase, “money can’t done,” meaning that fabulous wealth makes its own rules. In the Bahamas in recent months, it has become a gleeful reference to the once high-flying resident Sam Bankman-Fried.
From Washington to Wall Street, Bankman-Fried is now persona non grata. Politicians, investors and cryptocurrency types all but compete to declare most vigorously how little they think of Bankman-Fried, the fallen founder of the cryptocurrency exchange FTX.
Not so in the Bahamas, where Bankman-Fried lived for the past year in a lavish gated community on the western shore of New Providence Island, near the nation’s capital of Nassau. Few here predicted that he would spend his final week on the island farther inland to the east, in a neighbourhood home to high crime and shacks, inside perhaps the Caribbean’s most notorious prison.
“I think he had a good heart,” said Shemeca Moss, a Nassau school administrator. Moss was shopping on a recent afternoon at a beauty supply shop a few blocks from Fox Hill prison, where Bankman-Fried was held for a week before he was extradited to the United States last Wednesday to face sweeping fraud charges.
“He’s Bahamian,” she added, as part of the explanation for her sympathies.
The connection between Bahamians and Bankman-Fried, who was born and spent most of his life in California, reflects a complicated set of circumstances. Much as he did in the United States, Bankman-Fried donated millions of dollars to a dizzying collection of Bahamian charities, churches and government entities — including the local police. In March, FTX covered the cost of a ritzy resort ballroom used for a state reception to welcome Prince William and Catherine Middleton, then the Duke and Duchess of Cambridge, who were visiting the island.
‘I think he had a good heart. He’s Bahamian.’
Nassau school administrator Shemeca Moss
Once the golden boy of the crypto world, Bankman-Fried, 30, was arrested this month on criminal charges that included wire fraud, securities fraud, money laundering and violations of campaign finance laws. He is accused of diverting billions of dollars in customer funds to a trading platform he controlled. Two of his top former deputies pleaded guilty last week and are cooperating with federal prosecutors in building the case against him. One of them, Caroline Ellison, admitted to being involved in diverting customer funds, telling a federal judge, “I knew that it was wrong.”
Yet in interviews across the island Bankman-Fried called home for just over a year, residents almost universally said that while the white-collar nature of his crimes were troublesome, they were hardly comparable to the gang violence that pervades some corners of the island. They expressed fears of economic fallout for the island if he and the other cryptocurrency brethren he attracted don’t return.
Residents may find it easier to commiserate with Bankman-Fried because it is unlikely that FTX’s victims, who prosecutors say lost as much as $US8 billion ($11.2 billion) in the fraud, included many locals. Residents of the Bahamas must apply for special permission from the country’s central bank to invest in cryptocurrency, and the government levies a percentage fee for the privilege.
Perched on a concrete block in the shade outside the Nassau prison where the onetime wunderkind was held, Patrick Ferguson, a 61-year-old painter and longtime resident, said Bankman-Fried’s alleged crimes paled in comparison with those he generally associated with hard prison time. “It just doesn’t make any sense,” Ferguson said.
As the self-appointed standard-bearer for the crypto industry at large, Bankman-Fried was working to diversify the economy of an island that has long looked to expand beyond tourism, and that was punished by the decrease in visitors caused by the COVID-19 pandemic. He helped organise a spring crypto conference that brought in hundreds of well-heeled visitors.
At Albany, the oceanfront compound where he and his associates lived, they were known as generous employers; one delivery driver said he was tipped more than $US100 to bring a modest Burger King order to a cryptocurrency investor there.
In some instances, residents’ attitudes reflect simple empathy. “I feel bad for him,” said Philip Butler, an elder at Christian Life Church in Nassau.
‘I feel bad for him.’
Church elder Philip Butler
FTX’s new CEO, John Ray, in congressional testimony this month accused Bahamian authorities of illicitly withdrawing $US100 million from the cryptocurrency exchange in the hours before it collapsed. Ray called the process “irregular,” and said authorities have stonewalled his efforts to get answers. The securities regulator for the Bahamas denied that in a statement.
In the Bahamas, the overall crime rate is low but those found guilty often receive long sentences. Fox Hill, where Bankman-Fried was held, is known locally as “Fox Hell.” It bursts with 1,400 prisoners — 40 per cent more than it was built to house — and has limited running water, which often comes out brown, according to former prisoners and their families.
A former inmate released this year, Sean Hall, said a typical breakfast was grits with sardines, scooped into a moldy cup. For lunch, unseasoned ground meat with rice is common. Dinner is often not delivered at all. Violence was common, both at the hands of guards and fellow inmates.
By Fox Hill standards, Bankman-Fried received royal treatment. He was held in the prison’s medical wing with as many as five prisoners in a dormitory-style room that was under constant supervision, according to the administrator. A vegan, he was given toast and jam for breakfast; for lunches and dinners, he had stewed greens and other vegetables.
Still, the prison conditions weighed on Bankman-Fried’s decision to cut a deal with US prosecutors to be extradited to the United States, according to a person briefed on the discussions.
The prison’s warden, Doan Cleare, said his former charge was “well cared for.” Cleare would not say why Bankman-Fried was held in the medical bay but did say that he received no preferential treatment.
This article originally appeared in The New York Times.