Former FTX exec Nishad Singh charged by the SEC for defrauding investors

A former director of engineering at FTX was “an active participant” in a plan to deceive FTX’s investors and went so far as to withdraw millions from FTX for his personal use, the Securities and Exchange Commission alleged.  

Nishad Singh was charged Tuesday for “his role in a multiyear scheme” to defraud investors on the crypto exchange FTX, according to an SEC statement. That exchange filed for bankruptcy protection in November and its former CEO Sam Bankman-Fried is facing criminal and civil charges.  

Singh consented to a “bifurcated settlement” regarding the SEC charges, which awaits a court’s approval. Earlier on Tuesday Singh reportedly pleaded guilty to separate criminal charges brought by federal prosecutors. 

Singh was “an active participant” in a plan to deceive FTX’s investors, according to the SEC’s complaint. Singh went so far as to withdraw about $6 million from FTX for his personal use including a “multi-million dollar house and donations to charitable causes.” 

Alameda code

The SEC said Singh also created software code that allowed FTX customer funds to go to Alameda Research, a crypto hedge fund founded by Bankman-Fried and Gary Wang. That was done “despite false assurances by Bankman-Fried to investors that FTX was a safe crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges,” a statement from the SEC said.  

Singh knew or should have known that those statements were misleading, the agency said.  

“We allege that this was fraud, pure and simple: while on the one hand FTX touted its supposed effective risk mitigation measures to investors, on the other Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. 

The Commodity Futures Trading Commission and the U.S. Attorney’s Office for the Southern District of New York also announced charges against Singh in parallel actions. Singh pleaded guilty to six criminal charges brought by SDNY prosecutors in a court hearing on Tuesday, according to Reuters.

 The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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