Nishad Singh, the former head of engineering at bankrupt cryptocurrency exchange giant FTX, pleaded guilty to six criminal charges related to his activity with the firm during a court hearing on Tuesday.
The former executive’s crimes include wire fraud, conspiracy to commit wire fraud, conspiracy to commit money laundering and violation of campaign finance laws.
Another Guilty FTX Executive
the plea, reported by Reuters, was accepted by US District Judge Lewis Kaplan and is next in a list of similar guilty pleas from other top brass in Sam Bankman-Fried’s crypto empire. Alameda Research CEO Caroline Ellison and FTX Co-Founder Gary Wang begged guilty of multiple charges related to a years-long fraud scheme at FTX in December.
Word began to spread that Singh was planning a guilty plea earlier this month, as part of a plea deal with federal prosecutors. This followed the executive entrance in a bidding session with the SDNY attorney’s office in January, a semi-formal discussion in which Singh had limited immunity and in which the court could determine whether he had useful information related to the case.
After determining that he could help, Singh would be granted the opportunity for a plea deal, whereby the defendant pleads guilty and agrees to cooperate with prosecutors in exchange for a lesser sentence.
Singh’s involvement in the alleged FTX fraud seems pronounced: After moving from Alameda to FTX in 2019, the engineering chief modified FTX’s software in 2020 to prevent Alameda’s assets are automatically liquidated if their value falls below a certain price. According to Reuters, Singh included a comment in the platform’s code that read “Be very careful not to liquidate.”
This mechanism is related to charges against Bankman-Fried of the Securities and Exchange Commission (SEC), in which the agency said that Alameda had a “virtually unlimited line of credit” with FTX. The exchange’s new CEO, John Ray, claimed that FTX shared a balance sheet with Alameda and lost billions of dollars trading client assets.
bankman-fried maintains that he is not guilty of any crime related to the fall of FTX.
Singh’s involvement
In addition to exempting Alameda from liquidation, Singh helped mask the liabilities from the trading desk, diverting them to a secret Korean account that was not easily identifiable. This account enjoyed the same benefits as Alameda’s primary and secondary accounts on FTX.
Like Bankman-Fried, Singh was also entrenched in an illegal donations scheme that encompassed various US political candidates and action committees, with his total contributions amounting to more than $8 million. Much of that money must now be Returned to FTX as part of its bankruptcy proceedings, as much of it is expected to be client money.
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