FTX’s ex-engineering director agrees to plead guilty to US criminal charges
Nishad Singh, the former director of engineering at now bankrupt cryptocurrency exchange FTX, has agreed to plead guilty to US criminal charges, his lawyer said in court on Tuesday, as US prosecutors ramp up their investigation into members of Sam Bankman-Fried’s inner circle.
Bankman-Fried, FTX’s founder, was charged in December with eight counts of fraud and conspiracy. Prosecutors say he stole billions in FTX customer deposits to plug losses at his hedge fund Alameda Research, and lied to investors and lenders about his companies’ financial condition.
He has pleaded not guilty. Federal prosecutors in Manhattan have repeatedly urged people with knowledge of wrongdoing at FTX to come forward.
Singh’s plea is set to come after two of Bankman-Fried’s closest associates in December agreed to cooperate with prosecutors.
Caroline Ellison, who was Alameda’s chief executive, and Gary Wang, who was FTX’s chief technology officer, pleaded guilty to seven and four criminal charges, respectively.
FTX’s former top lawyer, Daniel Friedberg, has also cooperated with prosecutors, but has not been told he is under criminal investigation, a person familiar with the matter told Reuters in early January.
Several other former FTX executives have also hired lawyers to discuss possible cooperation with prosecutors.
Singh was a close friend of Bankman-Fried’s younger brother in high school, Bankman-Fried wrote in a deleted blogpost. After working at Alameda, Singh became FTX’s director of engineering in 2019, according to CNBC.
In 2020, Singh tweaked FTX’s software to exempt Alameda from having its assets sold automatically if it were
losing too much borrowed money, Reuters reported in December.
The exemption let Alameda keep borrowing from FTX regardless of how much collateral secured its loans.
“Be extra careful not to liquidate,” Singh wrote in a comment in the platform’s code, which was seen by Reuters.
The US Securities and Exchange Commission, which filed civil fraud charges against Bankman-Fried, has said the code change gave Alameda a “virtually unlimited line of credit” at FTX.
It also said the billions of dollars FTX secretly lent Alameda over the next two years came from FTX customers.
Bankman-Fried, 30, rode a boom in the values of bitcoin and other digital assets to amass an estimated $26bn net worth and become an influential US political donor.
Singh also became a major donor to Democratic politicians, contributing $8m to campaigns in the 2022 election cycle, according to OpenSecrets.