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Shocking: Former FTX Director of Engineering Nishad Singh pleads guilty to fraud charges

Bankrupt FTX recovers $7.3 billion in assets, plans to relaunch services in Q2

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TL;DR

  • Nishad Singh, a former Director of Engineering at FTX cryptocurrency exchange, is expected to plead guilty to fraud charges brought by U.S. prosecutors on February 28.
  • Singh’s lawyer stated that Singh had agreed to admit guilt for one count of wire fraud, one count of conspiracy to commit wire fraud against FTX customers, and one count of conspiracy to commit commodities fraud.

Nishad Singh, a former Director of Engineering at FTX cryptocurrency exchange, is expected to plead guilty to fraud charges brought by U.S. prosecutors on February 28. At the hearing in Manhattan federal court, his lawyer stated that Singh had agreed to admit guilt for one count of wire fraud, one count of conspiracy to commit wire fraud against FTX customers, and one count of conspiracy to commit commodities fraud.

Singh had been a close friend of Bankman-Fried’s younger brother in high school and later joined FTX as its Director of Engineering in 2019. In 2020, allegations arose that he had modified the exchange’s software to allow Alameda—where he previously served as Chief Executive—to circumvent automatic asset sales when it suffered excessive losses on borrowed money. This exemption meant that Alameda could continue borrowing from FTX without having to provide sufficient collateral for its loans.

The SEC has claimed that this code change gave Alameda an “unlimited line of credit” at FTX, leading to billions of dollars in loans being taken out by the firm over the next two years at the expense of other FTX customers. Singh returned back into public view early this month to participate in a proffer session with the Southern District of New York’s United States Attorney’s office. During such sessions, participants are typically offered some form of protection in exchange for providing useful information to prosecutors.

In December of 2022, two former executives of FTX and Alameda Research, Caroline Ellison and Gary Wang, pleaded guilty to fraud charges and were cooperating with the Justice Department’s investigation into Sam Bankman-Fried, former CEO of FTX.

Subsequently, Singh has now also filed a plea in connection with this case. Also, Bankman-Fried himself has pleaded innocent to eight federal charges and is currently living with his parents in California. His criminal trial is set to commence in October 2023 in a federal court, while the bankruptcy case for FTX continues in U.S. Bankruptcy Court for the District of Delaware.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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