Former FTX bigwig Nishad Singh pleaded guilty to fraud Tuesday, the third of fallen wunderkind Sam Bankman Fried’s executives to flip on him as he faces criminal fraud charges.
Singh copped to six counts including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws. The Securities and Exchange Commission also charged him with defrauding FTX’s equity investors in a “multi-year scheme.”
Singh, 27, worked for two years at Bankman-Fried’s hedge fund, Alameda Research, before helping launch FTX in 2020. The ex-Facebook engineer helped write the code underlying FTX’s operations and was deeply engaged in its operations—according to The Wall St Journal, he was one of three executives to know about Bankman-Fried’s plan to send FTX customer money to Alameda. He also lived with Bankman-Fried at the company’s Bahamian compound.
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According to Bloomberg, Singh could be a key figure in helping authorities investigate Bankman-Fried’s alleged straw-donor scheme, in which he allegedly made political contributions through other donors. Singh made $9.3 million in contributions to Democratic causes in 2020 and more than $8 million in the last cycle alone, according to campaign finance records. He also received a $543 million loan from Alameda last year, according to bankruptcy filings.
In making the plea deal, Singh becomes the third of Bankman-Fried’s confidants to cooperate with the authorities, joining FTX co-founder Gary Wang and former Alameda CEO—and SBF’s one-time girlfriend—Caroline Ellison. The Commodity Futures Trading Commission also filed fraud charges against Ellison and Wang in December; the SEC followed suit last month.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement that Singh’s conduct was “fraud, pure and simple.”
“While on the one hand FTX touted its supposed effective risk mitigation measures to investors, on the other Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create,” he said.
As the founder and CEO of FTX, Bankman-Fried faces the most criminal charges: eight counts, including fraud, money laundering and campaign finance violations. Prosecutors allege he ran a years-long scheme to defraud investors, ultimately resulting in a multi-billion-dollar loss of consumer funds when his company exploded in November. He has pleaded not guilty and is under house arrest at his parent’s home in Palo Alto.
