Former FTX engineering director faces up to 75 years in prison following guilty plea

Nishad Singh’s testimony was seemingly part of the prosecutors’ strategy to establish Sam Bankman-Fried as being behind Alameda Research using FTX user funds.

Nishad Singh, the former engineering director at now-defunct crypto exchange FTX, has reportedly said he “hopes for no jail time” as part of an agreement with prosecutors.

According to reports from the criminal trial of Sam “SBF” Bankman-Fried on Oct. 16, Singh revealed details about his deal with the United States Justice Department, which had him plead guilty to fraud charges announced in February. The former FTX engineer director reportedly said he faced up to 75 years in prison for charges related to defrauding users of the crypto exchange.

In his testimony, Singh reported that FTX had invested roughly $1.3 billion in endorsement deals with celebrities and sports figures — including Tom Brady, Gisele Bündchen and Steph Curry — prior to the crypto market crash of 2022. According to Singh, former FTX chief technology officer Gary Wang had told him Alameda Research had borrowed $13 billion from the crypto exchange — news that seemed unsurprising to Bankman-Fried.

“People are going to be freaking out,” said Singh, according to reports, speculating on the reaction to the Alameda news. “I felt betrayed, something I’d put in blood, sweat and tears for five years turning out so horrible.”

Singh reportedly said SBF had suggested investing $120 million into purchasing the messaging app Telegram and Alameda sent him FTX user funds specifically for making donations to political campaigns. When liquidity issues began occurring at FTX in November 2022, Singh said he “had been suicidal for some days” while dealing with alleged inconsistencies between the exchange’s public statements and its activities behind the scenes.

Related: FTX estate stakes 5.5M Solana coins

The former engineering director’s testimony came on the ninth day of Bankman-Fried’s criminal trial, which kicked off in New York on Oct. 3. Prior to the courtroom’s midday break on Oct. 16, Singh testified that SBF would sometimes “unilaterally spend Alameda’s money” in an “excessive” manner, including investments in artificial intelligence startup Anthropic and the firm K5 Global.

Bankman-Fried faces seven counts related to fraud in his first criminal trial and an additional five counts in a second scheduled to begin in March 2024. He has pleaded not guilty to all charges.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Source link