Former FTX director Nishad Singh pleads guilty to six U.S. charges, including wire fraud and money laundering.
FTX’s former Director of Engineering, Nishad Singh, has admitted to six criminal charges in a US court hearing on Tuesday, following an investigation into Sam Bankman-Fried’s inner circle by US prosecutors. Singh, who held the engineering director position at the now-bankrupt cryptocurrency exchange FTX, pleaded guilty to six charges in total. These charges included 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 US District Judge Lewis Kaplan accepted the plea.
Authorities are continuously investigating the founder of FTX, Sam Bankman-Fried, for eight counts of fraud and conspiracy. Prosecutors allege that Bankman-Fried stole billions of dollars from FTX’s customer deposits to cover losses at his hedge fund, Alameda Research. Bankman-Fried has pleaded not guilty to these charges. The investigation into FTX’s inner circle has been ongoing for some time, and prosecutors have encouraged individuals with knowledge of any wrongdoing to come forward.
Bankman-Fried, who amassed a net worth of $26 billion and became an influential US political donor, is accused of conspiring with two other former FTX executives to donate tens of millions of dollars in order to influence lawmakers to pass legislation favorable to the company. These donations were illegal because they were made with “straw” donors or corporate funds. Prosecutors have said that Bankman-Fried directed another FTX executive, identified as CC-1, to donate over $21 million to a pro-LGBT group. Bankman-Fried’s close associate, Caroline Ellison, who was Alameda’s CEO, and Gary Wang, FTX’s CTO, both pleaded guilty to criminal charges in December, and are cooperating with prosecutors.
More Conspiracy Regarding FTX
Nishad Singh was also a significant donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets. In July 2022, Singh contributed $1.1 million to the LGBTQ Victory Fund, a national organization dedicated to electing openly LGBTQ people. Singh and Bankman-Fried were close friends in high school, according to a deleted blog post written by Bankman-Fried. Singh became FTX’s Director of Engineering in 2019 after working at Alameda.
In December, Reuters reported that Singh tweaked FTX’s software to exempt Alameda from selling its assets automatically when losing borrowed money. The code change allowed Alameda to continue borrowing from FTX, regardless of how much collateral secured its loans. The US Securities and Exchange Commission has claimed that the code change gave Alameda a “virtually unlimited line of credit” at FTX. The SEC also stated that the billions of dollars FTX secretly lent Alameda over the next two years came from FTX customers.
FTX’s collapse has had significant repercussions within the cryptocurrency world and has been a blow to investor confidence. People in the industry are closely watching the investigation into FTX’s inner circle and its alleged illegal activities. Bankman-Fried’s enormous wealth and influence have also brought the spotlight on the issue of campaign finance, and the potential for wealthy donors to illegally influence politicians.
The guilty plea by Nishad Singh is a significant development in the case and highlights the seriousness of the charges against SBF and his associates.