Former Billionaire Nishad Singh Pleads Guilty In FTX Crypto Fraud Cases
March 4, 2023
This week, Nishad Singh pleaded guilty to criminal and civil charges of allegedly defrauding investors while he was at FTX Trading Ltd. (FTX), a Bahamas based cryptocurrency firm. Singh, 27-years-old, was the former Co-Lead Engineer of FTX, the Bahamas-based cryptocurrency trading platform he co-founded with Samuel Bankman-Fried and Gary Wang.
From May 2019 through November 11, 2022, “FTX customer assets were…misappropriated by Alameda, FTX, and Alameda executives for improper purposes such as luxury real estate purchases, political contributions, and high-risk, illiquid digital asset industry investments,” according to a complaint by the United States Commodities & Futures Trading Commission (CFTC).
In December 2022, U.S. prosecutors charged Bankman-Fried with allegedly misappropriating “billions of dollars of customer funds deposited with FTX.” This fraud on customers, investors, lenders, and the election campaign finance system “was not a case of mismanagement or poor oversight, but of intentional fraud, plain and simple.”
“Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create,” Gurbir Singh Grewal, Director of the U.S. Securities & Exchange Commission (SEC) Division of Enforcement, alleged in a statement. Also, the SEC alleges, “Singh was an active participant in the scheme to deceive FTX’s investors…(and) as FTX neared collapse, Singh withdrew approximately $6 million from FTX for personal use and expenditures, including the purchase of a multi-million dollar house…”
Subject to approval by a court, Singh has reached agreements with the SEC and CFTC to give up his financial gains from FTX, pay penalties and fines, be barred from serving as an officer or director of a company and face a ban from trading any securities.
Bankman-Fried and Wang, who met at a math camp in high school, were roommates at the Massachusetts Institute of Technology.
Singh was a close friend of Bankman-Fried's younger brother at Crystal Springs Uplands School, an elite private school in California’s Silicon Valley. Bankman-Fried also attended the same school. In 2012, while at school, Singh overcame asthma and set a world record for the fastest 100-mile run by a 16-year-old - 23 hours, 33 minutes and 57 seconds - according to the San Jose Mercury News. Singh’s parents, who lived in the affluent Silicon Valley town of Saratoga, are immigrants from India.
Singh earned a degree in Electrical Engineering and Computer Science from the University of California Berkeley, 2017, with high honors. He joined Facebook parent Meta but left a few months later to work with Bankman-Fried at Alameda. In 2019, he helped co-found FTX and became its Director of Engineering. Singh led the building of much of FTX’s technological infrastructure and managing most of its development team.
Unlike the two other FTX founders, Singh was more social and well-liked by colleagues, according to news reports. “(H)is treatment of employees has earned him sole membership in our Slack group ‘Kings of Kindness,’” Bankman-Fried wrote in a FTX blog post, according to Bloomberg.
In early 2022, at the peak of the cryptocurrency investment mania, FTX was valued at $32 billion, according to Forbes. At the time, based on Singh’s ownership of FTX and related entities, his estimated net worth was more than $2.7 billion. FTX filed for bankruptcy in November 2022.
A few months ago, Singh and Bankman-Fried were housemates in the Bahamas, living in a luxury penthouse with other FTX executives, according to the Wall Street Journal.
In December 2022, Wang and Sarah Ellison, former CEO of FTX affiliated Alameda, pled guilty to charges by the U.S. Attorney, SEC, and CFTC. Together with Singh they are co-operating in these agencies ongoing investigation of Bankman-Fried. FTX and others tied to the collapse and alleged fraud at FTX.
This week, as the charges against him were announced by U.S. agencies, Singh said at a court hearing in New York that “I’m unbelievably sorry for my role in all of this and the harm that it has caused.”
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