Nishad Singh of FTX pleads guilty to fraud and conspiracy charges

Nishad Singh, the former CTO of now-bankrupt cryptocurrency exchange FTX, pleaded guilty to six criminal fraud charges in court on Tuesday as US Attorney’s Office intensifies its investigation into members of Sam Bankman-Freed’s inner circle.

“I am incredibly sorry about my role in all of this,” Singh said, adding that he said by mid-2022 he knew that Bankman-Fried’s hedge fund, Alameda Research, was borrowing FTX clients and clients were not knew. Singh said he would forfeit the proceeds of the scheme.

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 anti-corruption laws. campaign finance. U.S. District Judge Lewis Kaplan accepted the application.

“Today’s guilty plea further underscores that the crimes at FTX were enormous in scope and impact,” said Manhattan U.S. Attorney Damian Williams. “They rocked our financial markets with a multi-billion dollar fraud. And they have corrupted our politics with tens of millions of dollars of illegal campaign contributions. These crimes require fast and reliable justice, and that’s exactly what we want in the Southern District of New York.”

Bankman-Fried, founder of FTX, was indicted in December on eight counts of fraud and conspiracy. Prosecutors allege he stole billions of FTX customer deposits to cover losses from his hedge fund Alameda Research and lied to investors and creditors about the financial health of his companies.

He pleaded not guilty. Manhattan federal prosecutors have repeatedly urged people with knowledge of FTX wrongdoing to report it.

Bankman-Fried, 30, has weathered the boom in the value of bitcoin and other digital assets to amass about $26 billion of net worth and become a powerful US political donor.

Singh has also become a major donor to Democratic politicians, donating $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.

Follow The Post about the Sam Bankman-Freed scandal on FTX

In new charges brought against Bankman-Fried last week, prosecutors said he colluded with two other former FTX executives to donate tens of millions of dollars to influence lawmakers to pass legislation favorable to the company.

According to prosecutors, the donations were illegal because they were made with “sham” donors or corporate funds. They said that Bankman-Fried had commissioned another FTX executive known as CC-1 to donate more than $21 million to the pro-LGBT group.

Federal Election Commission records show that on July 7, 2022, Singh contributed $1.1 million to the LGBTQ Victory Fund, a national organization dedicated to the open election of LGBTQ representatives.

Singh’s statement came after two of Bankman-Freed’s closest associates agreed to cooperate with prosecutors in December.

Caroline Ellison, chief executive officer of Alameda, and Gary Wang, chief technology officer of FTX, pleaded guilty to seven and four criminal charges, respectively.

Separately on Tuesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission filed civil lawsuits against Singh.

Singh, 27, was a close friend of Bankman-Fried’s younger brother in high school, Bankman-Fried wrote in a since-deleted blog post. After working at Alameda, Singh became FTX’s CTO in 2019, according to CNBC.

In 2020, Singh tweaked FTX software to exempt Alameda from automatically selling assets if it loses too much leverage, Reuters reported in December.

The exemption allowed Alameda to continue borrowing from FTX regardless of the collateral that secured its loans.

“Be especially careful not to liquidate,” Singh wrote in a comment on the platform code seen by Reuters.

The Securities and Exchange Commission, which filed civil fraud charges against Bankman-Fried, said the code change gave Alameda a “virtually unlimited line of credit” on FTX.

It also states that the billions of dollars that FTX secretly loaned to Alameda over the next two years came from FTX customers.