Nishad Singh, a former executive of crypto exchange FTX, is reportedly preparing to plead guilty to US criminal charges over his alleged involvement in an extensive multiyear fraud scheme.
Singh has been negotiating a deal with Manhattan prosecutors as they prepare to file fraud charges against him, according to sources familiar with the matter.
The details of the agreement could potentially involve cooperation with authorities, which would further sequester Sam Bankman-Fried, who has pleaded not guilty to an eight-count indictment and is awaiting trial.
The ongoing investigation into the spectacular collapse of FTX in November 2022 is one of the most high-profile corporate crime cases in the history of the United States.
Officials have alleged that Bankman-Fried orchestrated a years-long scam that involved misleading investors and misusing billions of dollars of FTX customer funds for personal expenses and risky bets at Alameda, the trading firm affiliated with the crypto exchange.
The former FTX exec played a significant role in the day-to-day operations at FTX as the head of engineering. He also had a close personal relationship with Bankman-Fried and even lived with him in a penthouse in the Bahamas.
Singh was hired at Alameda in 2017 before establishing FTX two years later with Wang and Bankman-Fried. He contributed to writing the software that the exchange was built on and played a key role in the launch of FTX US in 2020.
If he cooperates with authorities, he could provide valuable insight into the campaign finance side of the defunct company, which US officials have been looking into. Bankman-Fried’s indictment accused him of violating campaign finance laws.
He has given more than $9.3 million to Democratic candidates and committees since 2020, according to filings. Among the largest recipients was Mind The Gap, a political action committee founded by Bankman-Fried’s mother that received $1 million from Singh in April 2021. He also received hundreds of millions of dollars in loans from Alameda Research, according to bankruptcy court filings.
Other details in the FTX case
Two other former associates of Bankman-Fried, Gary Wang and Caroline Ellison, pleaded guilty last year to charges in connection with their roles at FTX and Alameda Research and are working with prosecutors.
The Commodity Futures Trading Commission and the Securities and Exchange Commission are also planning to sue Singh over his role in the alleged scheme, according to one of the sources.
The restructuring team overseeing the bankruptcy has warned investors to be on the lookout for scam tokens that aim to take advantage of the exchange’s troubles.
In a recent tweet, the company cautioned, “The FTX Debtors have not issued any debt token, and any such offers are unauthorized.” It is unclear if the warning was related to a new token called FTX Users’ Debt, or FUD, listed on Justin Sun’s Huobi exchange since February 7.
FTX’s troubles have been a major blow to the cryptocurrency industry, and the ongoing investigation into its alleged wrongdoing has rattled investors worldwide.
As the FTX saga continues to unfold, more details will likely emerge in the coming months. It remains to be seen whether Singh’s cooperation will lead to further revelations that could have serious implications for the crypto industry as a whole.
