Nishad Singh, the former Director of Engineering at bankrupt cryptocurrency exchange, FTX, on Tuesday became the third of close allies of Samuel Bankman-Fried, the exchanges Co-Founder, to plead guilty to fraud charges.
On Tuesday, both the United States Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) accused Singh with misappropriating funds from FTX.com and aiding and abetting Bankman-Fried and hedge fund Alamedia Research LLC in diverting FTX customer assets. CFTC said it charged Sigh before a district court in southern New York.
27-year-old Singh pleaded guilty to six counts of fraud charges including wire fraud, conspiracy to commit fraud, money laundering and deceiving the United States. In December last year, Carline Elison, the former Chief Executive Officer of Alameda Research and Gary Wang, FTXs Chief Technology Officer, pleaded guilty to several counts of criminal crimes.
In its complaint, SEC accused Singh of helping Bankman-Frieds transfer of FTX.com customer assets to Alameda Research by designing a software code that permitted customer cash to be redirected to the crypto hedge fund. This is true even though Bankman-Fried allegedly made FTX investors “false assurances” regarding the security of their money.
These features in the FTX code, which included—and this is crucial—the can withdraw below borrow capability that allowed Alameda to withdraw billions of dollars in customer assets from FTX, among other things, favoured Alameda and allowed it to carry out transactions even when it lacked sufficient funds.
In addition, Singh took around $6 million from FTX for personal use and expenditures, including the purchase of a multi-million dollar home and contributions to charitable organisations, the SEC stated. This took place just before FTX collapsed in November 2022.
Singh has agreed to give up some of the assets he obtained from FTX and Alamedia Research, the CFTC has noted. Even while charges were being revealed against the former FTX CEO, the US Attorney's Office for the Southern District of New York made the announcement.
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