Nishad Singh, former Director of Engineering at FTX, pleaded guilty to fraud charges Tuesday and agreed to cooperate with prosecutors against FTX founder Sam Bankman-Fried.
Singh pleaded guilty to six charges including wire fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws, CNBC reported.
Nishad Singh, former director of engineering at FTX, has pled guilty to six charges including fraud charges, conspiracy to commit money laundering, and a charge related to campaign finance violations. He will cooperate against SBF.
— Molly White (@molly0xFFF) February 28, 2023
The hearing took place in a Manhattan court, where Singh apologized for his behavior and agreed to work with prosecutors on their fraud case against Bankman-Fried. (RELATED: Sam Bankman-Fried Allegedly Pushed Straw Donor To Fund ‘Woke Sh*t For Transactional Purposes’: Indictment)
“Today’s guilty plea underscores once again that the crimes at FTX were vast in scope and consequence,” said Damian Williams, U.S. Attorney for the Southern District of New York, per the New York Times (NYT). “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.”
Bankman-Fried was charged with 12 counts of fraud and conspiracy in a superseding indictment on Thursday, including counts related to wire fraud, money laundering, unlawful political donations, and defrauding the Federal Election Commission. The charges stem from allegations FTX executives misused customer funds to enrich themselves.
Singh was known as a “Bankman-Fried guy” and the two were reportedly roommates in Bankman-Fried’s Bahamas penthouse. Prosecutors said in the guilty plea that Singh lied to regulators and knew about FTX’s efforts to artificially inflate its revenue, NYT reported.
The Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) both filed civil complaints against Singh on Tuesday for misusing FTX customer funds and creating code to enable the scheme. He is cooperating with the SEC investigation and agreed to settle with the CFTC, CNBC reported.
Singh knowingly lied about FTX’s revenue in 2021 by fraudulently transferring $50 million to FTX and mischaracterizing the dates of the transfers, according to the SEC complaint. He also withdrew $6 million in customer funds to buy a house and make charitable contributions, the agency said.
Two other business associates of Bankman-Fried, Caroline Ellison and Gary Wang, entered similar plea agreements in December for allegedly committing fraud. Ellison was the CEO of Alameda Research, a crypto hedge fund founded by Bankman-Fried. Wang co-founded crypto exchange FTX with Bankman-Fried and served as the organization’s chief technology officer.
FTX declared bankruptcy in November shortly after reports of misused customer funds surfaced. The Bahamas-based crypto exchange and its U.S. operation were worth a combined $40 billion in January 2022 after a fundraising round.