Former FTX Executive Nishad Singh Pleads Guilty to Criminal Charges; To Cooperate in Sam Bankman-Fried Investigation
- The 27-year-old Indian American is the third member of the disgraced founder’s inner circle to plead guilty over the crypto exchange’s collapse.
Nishad Singh, former director of engineering at now-bankrupt cryptocurrency exchange FTX, pleaded guilty to U.S. criminal charges yesterday (Feb. 28). He also agreed to cooperate with prosecutors’ investigation into disgraced founder Sam Bankman-Fried in the case that’s being described as “one of the biggest financial frauds in American history.”
Singh, 27, pleaded guilty to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws. The charges against him carry a maximum prison term of 75 years.
“Today’s guilty plea underscores once again that the crimes at FTX were vast in scope and consequence,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement. “They rocked our financial markets with a multibillion-dollar fraud. And they corrupted our politics with tens of millions of dollars in illegal straw campaign contributions.”
The New York Times notes that Singh’s cooperation “heightens the pressure on Bankman-Fried, 30, who has been charged with orchestrating a scheme to use billions in customer deposits to finance political contributions, fund more than 300 ventures and cover other lavish spending.”
In a statement issued to media including Reuters and The New York Times, Singh’s lawyers Andrew Goldstein and Russell Capone said their client “is deeply sorry for his role in this and has accepted responsibility for his actions.” He wants to do everything he can to make things right for victims, including by assisting the government to the best of his ability.”
Speaking at the hearing on Feb. 28, Singh apologized for his role in the fraud, telling the court that the would forfeit proceeds from the scheme. He admitted that he was aware by “mid-2022 that Bankman-Fried’s hedge fund, Alameda Research, was borrowing FTX customer funds, and customers were not aware.”
The Indian American is the third member of Bankman-Fried’s inner circle to plead guilty over the crypto exchange’s collapse. Caroline Ellison, who was Alameda’s chief executive, and Gary Wang, who was FTX’s chief technology officer, pleaded guilty in December to seven and four criminal charges, respectively, as reported by Reuters.
He was among the nine housemates that lived with Bankman-Fried’ in a luxury penthouse in the Bahamas from where ran the cryptocurrency empire. He was “a close friend of Bankman-Fried’s younger brother in high school,” Reuters said, citing a “now deleted blog post” by Bankman-Fried. He traveled back from the Bahamas shortly after FTX imploded in November in part to assist the U.S. investigation, and was released on $250,000 bond.
“Singh also became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle,” according to OpenSecrets, a research and government transparency group tracking money in politics and its effect on elections and policy.” He told the court on Feb. 28 that “he agreed in 2022 to make political donations in his own name that were funded in part by transfers from Alameda, without providing details of the donations. He said that while he agreed with the political leanings of those he donated to, he did not select the candidates,” Reuters reported.
Singh joined Alameda Research in December 2017, where he was the director of engineering for 17 months. Before that, he worked as a software engineer at Facebook, an entry-level position, where he worked on machine learning, according to hisLinkedIn profile. In April 2019, Singh moved to FTX and occupied the top post of director of engineering since.
In a 2020 FTX podcast, Singh talked about his “dream job” at Facebook and his decision to switch to Alameda Research after meeting Bankman-Fried. “It was in an apartment at the time, it was quite early. I think I first visited Alameda when it was like a month into its existence,” he said, adding that there were around five other people in the apartment and the scene was chaotic. “What was obvious that the things they wanted to do, were really important and really fruitful.”
Separately on Feb. 28, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission filed civil lawsuits against Singh. According to the SEC’s complaint, “Singh created software code that allowed FTX customer funds to be diverted to Alameda Research, despite false assurances by Bankman-Fried to investors that FTX was a safe crypto asset trading platform, and that Alameda was just another customer with no special privileges.” The complaint alleges that Singh knew or should have known that such statements were false and misleading.
The complaint also alleges that Singh was an active participant in the scheme to deceive FTX’s investors. Despite knowledge of the fraud, he “directed hundreds of millions of dollars more in FTX customer funds to Alameda, which were used for additional venture investments and loans to Bankman-Fried, Singh, and other FTX executives.” Moreover, according to the complaint, “as FTX neared collapse, Singh withdrew approximately $6 million from FTX for personal use and expenditures, including the purchase of a multi-million dollar house and donations to charitable causes.”