FTX Chief Engineer Pleads Guilty to Fraud and Conspiracy Charges
Nishad Singh, the former chief engineer of both FTX and Alameda Research, pleaded guilty to six criminal charges on February 28th. Sam Bankman-Fried’s other close associates, Caroline Ellison, and Gary Wang, already pleaded guilty in late 2022 and agreed to cooperate with US authorities.
Nishad Singh of FTX Pleads Guilty
On Tuesday, February 28th, Nishad Singh, who served as the chief engineer both at FTX and Alameda, pleaded guilty to six counts of fraud and conspiracy to commit fraud. Such a move has been widely anticipated since a probe into Singh’s role in the operations and downfall of the cryptocurrency exchange first emerged in early January. Soon after the plea was revealed, the SEC unveiled its charges against Singh.
According to the SEC’s complaint, Singh created software code that allowed FTX customer funds to be diverted to Alameda Research, a crypto hedge fund owned by Bankman-Fried and Wang, despite false assurances by Bankman-Fried to investors that FTX was a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges. The complaint alleges that Singh knew or should have known that such statements were false and misleading.
The most recent guilty plea leaves Sam Bankman-Fried as the last member of the so-called “wirefraud” inner circle—named after the Signal group its members used to communicate—to maintain his innocence. Gary Wang and Caroline Ellison entered their guilty pleas already in late 2022, just days after SBF was arrested in the Bahamas.
Both Wang and Ellison agreed to cooperate with the prosecutors. Furthermore, Ellison confirmed to a judge the earlier allegations Alameda Research conspired with FTX to misuse customer assets and provide—and hide from the public eye—loans worth billions of dollars to the company’s executives.
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Prosecutors Ramp up Charges Against Sam Bankman-Fried
While Sam Bankman-Fried, the co-founder and former CEO of FTX, accrued an impressive number of criminal and civil charges for his involvement with the cryptocurrency exchange and its sister company Alameda Research, things have only gotten worse for the former billionaire since the beginning of 2023. On February 23rd, a superseding indictment against SBF was unsealed bringing the total number of charges against him from eight to twelve.
Along with the criminal charges filed by the DoJ, FTX’s former CEO is also facing civil complaints filed by the SEC and the CFTC. The two regulators have, however, recently been asked to postpone their own cases against Bankman-Fried until the criminal case is resolved. The trial is scheduled to begin in October.
Additionally, SBF’s $250 million bail bond that saw him released to home detention in early January is also at risk of being revoked. Bankman-Fried is believed to have attempted to influence witnesses using encrypted messaging apps. His recent use of a VPN—allegedly to watch the Super Bowl—also came under scrutiny earlier in February.
Editorial note (February 28th, 7:35 PM EST): Information about the SEC’s complaint was added.
Do you think Singh’s plea will help the prosecutors convict Sam Bankman-Fried? Let us know in the comments below.
