The fraud case against Sam Bankman-Fried (SBF), founder of cryptocurrency exchange FTX, ushered in a new development. FTX co-founder and former engineering director Nishad Singh has pleaded guilty to a string of criminal charges and has agreed to cooperate with the prosecution against SBF as the third tainted witness in the case.
Nishad Singh, 27, pleaded guilty Tuesday 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 commit fraud against campaign finance laws. He told the hearing:
I am incredibly sorry for my role in this incident and the hurt I have caused.
Nishad Singh admitted that as early as mid-2022, he knew that Alameda Research had “borrowed” billions of dollars in client funds from FTX, and that clients did not know about it. By September, Alameda Research was unable to repay the funds. Nishad Singh claims that, at the direction of SBF, he falsified FTX’s revenue to make the company more attractive to investors. He said:
I took actions to make it appear that FTX’s revenue was higher than it really was, and submitted this information to the auditors, knowing that I was doing it wrong.
Nishad Singh received as much as $543 million in “loans” from Alameda Research, according to bankruptcy documents. In this regard, he has agreed to give up fraudulent gains.
On the other hand, in order to strengthen the political influence of FTX and SBF, Nishad Singh also agreed to make political donations in his own name last year, part of which came from Alameda Research, but did not provide detailed information about the donation.
Nishad Singh is the third former FTX executive to plead guilty and cooperate with the prosecution. Previously, two important deputies of SBF: Caroline Ellison, former CEO of Alameda Research, and Gary Wang, another co-founder of FTX, have both pleaded guilty.
On the same day that Nishad Singh pleaded guilty, the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) also issued civil complaints against him. Nishad Singh is cooperating with the SEC’s investigation and he agreed to settle with the CFTC, the agencies said.