Nishad Singh, the former director of engineering at now-bankrupt cryptocurrency exchange FTX, pleaded guilty to six criminal fraud charges in a court hearing on Tuesday, as US prosecutors intensify 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 scope and ramifications of the crime at FTX was enormous,” said Manhattan US Attorney Damian Williams. “They rocked our financial markets with billions of dollars of fraud. And they corrupted our politics with hundreds of millions of dollars in illegal straw campaign contributions. These crimes demand swift and sure justice and that is exactly what we are doing in the Southern District of New York. are wanting
Bankman-Fried, the founder of FTX, was indicted in December on eight counts of fraud and conspiracy. Prosecutors say he stole billions in FTX customer deposits and lied to investors and lenders about the financial condition of his companies to cushion losses at his hedge fund, Alameda Research.
He has pleaded not guilty. Federal prosecutors in Manhattan have repeatedly urged people with knowledge of wrongdoing on FTX to come forward.
Bankman-Fried, 30, has driven a rapid rise in the value of bitcoin and other digital assets to amass an estimated $26 billion net worth and has become an influential US political donor.
Singh became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.
In new charges filed against Bankman-Fried last week, prosecutors said she conspired with two other former FTX executives to donate hundreds of millions of dollars to influence lawmakers to pass legislation favorable to the company.
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Prosecutors said the donations were illegal because they were made with “straw” donors or corporate funds. They said Bankman-Fried directed another FTX executive, identified as CC-1, to donate more than $21 million to an LGBT advocacy 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 close associates of Bankman-Fried agreed to cooperate with prosecutors in December.
Carolyn Allison, 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 since-deleted blog post. According to CNBC, after working at Alameda, Singh became director of engineering at FTX in 2019.
In 2020, Singh tweaked FTX’s software to exempt Alameda from selling its assets if it was losing too much borrowed money, Reuters reported in December.
The waiver allowed Alameda to continue borrowing from FTX regardless of how much collateral secured its loans.
“Be extra careful not to get liquidated,” 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, said the code change gave Alameda a “virtually unlimited line of credit” on FTX.
It also said that billions of dollars of FTX were secretly transferred to Alameda over the next two years, which came from FTX customers.
