Bankman-Fried’s FTX inner circle continues to crumble with guilty plea
Former FTX engineering chief Nishad Singh pleaded guilty to fraud as part of a cooperation deal with prosecutors, the third member of the collapsed cryptocurrency exchange’s inner circle to flip against cofounder Sam BankmanFried.
Singh said at a hearing on Tuesday that he was “unbelievably sorry for my role in this and the harm it caused.” He admitted he knew for months that Alameda Research, the exchange’s trading arm, was borrowing billions of dollars in funds from FTX without customers’ knowledge.
“I took actions to make it appear that FTX’s revenues were higher than they were and provided that information to auditors,” Singh told the court. “I knew my conduct was wrong.”
Singh, 27, pleaded guilty to six criminal counts, inWang cluding wire fraud, conspiracy to commit securities fraud and a campaignfinance violation, in Manhattan federal court after making his cooperation agreement with federal prosecutors in the Southern District of New York.
He is the third close associate of Bankman-Fried to plead guilty and sign on as a cooperating witness for the government. Gary and Caroline Ellison pleaded guilty last year to charges in connection to their roles at FTX and Alameda Research and are working with the government.
A representative for Bankman-Fried declined to comment on Singh’s plea.
“Nishad is deeply sorry for his role in this and has accepted responsibility for his actions,” Singh’s lawyers, Andrew D. Goldstein and Russell Capone, said in a statement. “He wants to do everything he can to make things right for victims, including by assisting the government to the best of his ability in this case.”
Also on Tuesday, the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission filed civil lawsuits against Singh. Both agencies alleged that he created software code that allowed FTX customer assets to be transferred to Alameda.
According to the SEC complaint, Singh played an
active role in deceiving investors and was aware that Bankman-Fried had directed hundreds of millions of dollars of customer funds to Alameda to be used for loans and venture investments even as it became clear there was a shortfall because of client money already sent to the hedge fund.
Singh has provided prosecutors with a window into the political-donations side of the FTX operation. He had given more than $9.3 million to Democratic candidates and committees since 2020, according to campaign-finance filings. Among the largest recipients was Mind the Gap, a political action committee that was founded by Bankman-Fried’s mother and received $1 million from
Singh in April 2021.
Last week, federal prosecutors filed four additional charges against BankmanFried, accusing him of using FTX executives to make millions of dollars of political donations in hopes of influencing crypto regulation.
Singh walked out of court on Tuesday after signing a $250,000 bond. Assistant U.S. Attorney Danielle Sassoon told the judge the government had agreed to the relatively low bond for Singh because he had voluntarily traveled back to the U.S. from the Bahamas to meet with investigators after the collapse of FTX in November.
Singh had a close personal relationship with Bankman-Fried, living with him in a Bahamas penthouse.
‘‘ I TOOK ACTIONS TO MAKE IT APPEAR THAT FTX’S REVENUES WERE HIGHER THAN THEY WERE. ... I KNEW MY CONDUCT WAS WRONG.
Nishad Singh