Welcome back to Dry Powder. I’m William D. Cohan.

This evening, a respite from the roiling controversy surrounding the Paramount deal heat… Instead, I’m bringing you a piece on my recent conversation with Sam Bankman-Fried at the bleak Metropolitan Detention Center in Brooklyn. Our discussion was stunning and jarring—and a bookend, in some ways, to my partner Teddy Schleifer’s brilliant piece on his era of home confinement, The Only Living Boy in Palo Alto.

I hope you enjoy the piece. Let me know what you think by responding to this email.

I first met Sam Bankman-Fried in December 2021, during the height of his power and influence, when he was the richest person in the world under 30. My friend Anthony Scaramucci, a.k.a. The Mooch, had connected us. On a cold winter night at the One Hotel, on Sixth Avenue, I interviewed him for a documentary I am part of making about Bitcoin and its developer, Satoshi Nakamato. Sam showed up an hour late, in a black t-shirt and cargo shorts, apparently having just flown in via private jet from the Bahamas. A month later, Sam’s cryptocurrency exchange, FTX, would raise its final $400 million round of financing from a group of highfalutin investors—led by Softbank, Temasek, and Paradigm—at a valuation of $32 billion, making the company one of the most valuable in the sector. At that moment, Sam was said to be worth $26 billion.

This week, we reconnected amid very different circumstances. Sam and I arranged for this visit through his Corrlinks email account, at the suggestion of his mother, Barbara Fried, and the family’s prison advisor. We met on Tuesday around 1 p.m. because that was the only day that visiting hours are permitted at MDC, a hangover from the Covid era. Prisoners can have visitors for one of two sessions, either starting at noon or at five in the afternoon.

We were meeting later than noon because of the staffing shortage at the facility. I was allowed to bring in $1 or $5 bills, up to a total of $30, in case I wanted to buy Sam some water, soda, or snacks from the humming vending machines. I was told to put my $20 bill as well as my wallet and iPhone into a locker. Sam was not permitted to buy anything himself.

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. (I knew this in advance, of course, and set about preserving my recollections of our conversation immediately after leaving the facility.)

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.

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. We joked briefly about how the arbitrage opportunities in jail were better than anything he experienced trading crypto at Jane Street Capital or buying and selling assets at Alameda. He looked me in the eye pretty much the whole time, something he rarely did with people in the old days.

After we shook hands, he sat down in his own plastic chair as a camera watched us from the ceiling. We were surrounded by a couple of other inmates, dressed similarly, facing their visitors. Sam declined my initial offer to buy him some snacks but ultimately agreed to a $4 bottle of water and a small $2 package of Wheat Thins, which he eagerly consumed.

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. In March, he was sentenced to 25 years in prison. Our chat, under these rather drastic circumstances, was a profoundly jarring and fascinating experience.

When I told him he seemed better than I had anticipated, he replied that he’d become good at faking it. So, yes, life inside the MDC is not the Bahamas. But, truly, I had expected to see him coping less well. At the MDC, Sam has mostly been permitted his prescription medications, and the cocktail he’s been allowed has him thinking clearly, he said, and energized for the legal battle he plans to wage soon against the verdict.

In the meantime, he told me, he doesn’t fear for his safety. He can use the bathroom and shower a couple of times a week in peace. He’s always been a light sleeper, and he’s still not sleeping soundly at the MDC, but mostly because people sometimes bug him during the night about those bags of rice, which they intend to use to barter. He has not been touched or abused, and he seemed notably thankful for that.

He acknowledged that he has a unique rap sheet at MDC, and his fellow prisoners indeed recognize him. He estimated that about half of the other 35 men in his unit were murderers who had been turned into cooperating witnesses for the prosecution in exchange for not serving a life sentence. In prison, many inmates consider cooperating witnesses the lowest form of vermin, lower even than child molesters. Sam also told me that some of the other prisoners tried to get close to him, thinking they would benefit financially from the proximity to a former billionaire. He doesn’t play along, he said.

We didn’t talk about his trial strategy or whether he intentionally siphoned off the $8 billion of FTX customer funds into Alameda. Both topics seemed moot at this point. 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 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.

Sam became the target of federal prosecutors, he told me, soon after his outside counsel at Sullivan & Cromwell made a presentation to them, on November 9, 2022, a day or so before the bankruptcy filing, about what they believed Sam may have engineered between FTX and Alameda, which has been described as the theft of $8 billion of customer money. In a sworn declaration about that meeting, S&C attorney Andrew Dietderich said he reported to the D.O.J. only what Ryne Miller, FTX’s U.S. general counsel, told him about a problem of “reconciling digital assets with entitlements” on FTX’s U.S. exchange, and nothing about Sam and his alleged transgressions.

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. (S&C declined to comment on Sam’s theory of the case. It’s also fair to reiterate here that Sam was sentenced to 25 years in prison after a jury convicted him of the crimes described above.)

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. Why, Sam wondered, was he prosecuted when no one at either Bear or Lehman faced criminal prosecution? 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.

According to Sam’s theory, he isn’t in prison for commingling assets of FTX and Alameda. Instead, he’s an innocent guy who didn’t get a chance to negotiate a deal with the federal prosecutors, and wonders why he was even prosecuted at all for what he believes was a form of a bank run. Instead, they just presented him with his indictment and told him he could eat it— accept it and plead guilty and then get sentenced, or go to trial and try to fight it. Since there was no plea bargain on the table, he said, he fought the charges at trial, and lost. Unlike his fellow inmates, he told me, Sam speaks to his new attorney nearly every weekday for an hour or so, as the focus of his appeal comes into view. He expects to file it this fall. Yes, he will appeal, but most people think he faces long odds of success.

On the day of my visit, Sullivan & Cromwell, still counsel to the debtor-in-possession in FTX’s bankruptcy case, filed a first draft of a plan of reorganization that appears to give its customers and creditors all of their money back, plus a little more—a return of $15 billion on $12 billion of claims—in large part because of the investments Sam made through Alameda. The plan, which still has a long way to go before being confirmed, also gives Sullivan & Cromwell, along with other FTX advisors, “exculpation” from future lawsuits related to its conduct in the matter. This is not unusual in a plan of reorganization. But Sam has exhaustive thoughts on this subject, which I may explore with him in a follow-up conversation.

If he does get moved out of Brooklyn, his family and legal team worry, he could spend as long as four months on a bus, handcuffed to the seat, making his way, slowly, across the country. Such prison buses make frequent stops—picking up new prisoners, dropping off others—which explains why they take so long to reach their final destinations. There’s also a remote possibility that he could be placed on one of the many planes operated by the U.S. Marshals Service, a.k.a. “Con Air.” But he’s more likely to get the infamous “diesel therapy,” they fear. Either way, during this hypothetical cross-country journey, Sam would be completely incommunicado with both his family and his lawyers until he reaches his new home in California, deprived of the minimal access to the internet and email he now enjoys in Brooklyn.

Just as we were getting ready to discuss some knotty issues, such as his choices during his trial or the fact that many of the people who once worked for him had turned against him to save themselves, our visiting time was up. It was non-negotiable. We quickly shook hands again. Then Sam went back to his dormitory and I went back outside into a glorious spring afternoon.