Nishad Singh, the former director of engineering at now-bankrupt cryptocurrency exchange FTX, pleaded guilty to six criminal fraud charges at a court hearing on Tuesday, as US prosecutors ramp up their investigation into members of Sam Bankman-Fried’s inner circle.
Singh pleaded guilty to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws. US District Judge Lewis Kaplan accepted the plea.
“Today’s guilty plea underscores once again that the crimes at FTX were vast in scope and consequence,” said Manhattan US Attorney Damian Williams. “They rocked our financial markets with a multibillion dollar fraud. And they corrupted our politics with tens of millions of dollars in illegal straw campaign contributions. These crimes demand swift and certain justice and that is exactly what we are seeking in the Southern District of New York.”
Bankman-Fried, FTX’s founder, was charged in December with eight counts of fraud and conspiracy. Prosecutors say he stole billions in FTX customer deposits to plug losses at his hedge fund Alameda Research, and lied to investors and lenders about his companies’ financial condition.
He has pleaded not guilty. Federal prosecutors in Manhattan have repeatedly urged people with knowledge of wrongdoing at FTX to come forward.
Bankman-Fried, 30, rode a boom in the values of bitcoin and other digital assets to amass an estimated $26 billion net worth and become an influential US political donor.
Singh also became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.
Catch up on noti.group’s latest in the Sam Bankman-Fried FTX scandal
In new charges filed against Bankman-Fried last week, prosecutors said he conspired with two other former FTX executives to donate tens of millions of dollars to influence lawmakers to pass legislation favorable to the company.
The donations were illegal because they were made with “straw” donors or corporate funds, prosecutors said. They said Bankman-Fried directed another FTX executive, identified as CC-1, to donate more than $21 million to a pro-LGBT group.
Federal Election Commission records show that Singh contributed $1.1 million on July 7, 2022 to the LGBTQ Victory Fund, a national organization dedicated to electing openly LGBTQ people.
Singh’s plea came after two of Bankman-Fried’s closest associates in December agreed to cooperate with prosecutors.
Caroline Ellison, who was Alameda’s chief executive, and Gary Wang, who was FTX’s chief technology officer, pleaded guilty to seven and four criminal charges, respectively.
Singh, 27, was a close friend of Bankman-Fried’s younger brother in high school, Bankman-Fried wrote in a deleted blog post. After working at Alameda, Singh became FTX’s director of engineering in 2019, according to CNBC.
In 2020, Singh tweaked FTX’s software to exempt Alameda from having its assets sold automatically if it were losing too much borrowed money, Reuters reported in December.
The exemption let Alameda keep borrowing from FTX regardless of how much collateral secured its loans.
“Be extra careful not to liquidate,” Singh wrote in a comment in the platform’s code, which was seen by Reuters.
The Securities and Exchange Commission, which filed civil fraud charges against Bankman-Fried, has said the code change gave Alameda a “virtually unlimited line of credit” at FTX.
It also said the billions of dollars FTX secretly lent Alameda over the next two years came from FTX customers.
[Written in collaboration with other media outlets with information from the following sources]
