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Nishad singh – Former Genius Leader to Fail Crypto Giant Exchange ftx – pleaded guilty to six criminal charges in connection with his activities with the firm at a hearing on Tuesday.
Ex executive crimes include electronic fraud, conspiracy to commit electronic fraud, conspiracy to launder money, and violation of election financing laws.
Another FTX corporate culprit.
The plea, reported by Reuters, was accepted by U.S. District Judge Lewis Kaplan and is the next in a list of similar guilty admissions from fellow higher-ups in Sam Bankman-Fried’s crypto empire. Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to 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’s entrance into a proffer session with the SDNY attorney’s office in January – a semi-formal discussion in which Singh had limited immunity, and where the court could determine if he had useful information related to the case.
After he figured out he could help, Singh would then be given the opportunity to plea bargain – through which an accused pleads guilty and agrees to cooperate with prosecutors in exchange for a less severe sentence.
Singh’s involvement with the alleged FTX fraud appears steep: After moving from Alameda to FTX in 2019, the engineering chief tweaked FTX’s software in 2020 to prevent Alameda’s assets from being automatically liquidated if their value fell below a certain price. According to Reuters, Singh included a commentary in the platform code which reads "Additional caution not to liquidate."
This mechanism is related to charges against Bankman-Fried from the Securities and Exchange Commission (SEC), in which the agency said Alameda held a “virtually unlimited line of credit” with FTX. The exchange’s new CEO, John Ray, has claimed that FTX shared a balance sheet with Alameda, and lost billions of dollars while trading with customer assets.
Bankman-Fried maintains that he is not guilty of any crime relating to the fall of FTX.
Singh’s Involvement
In addition to exempting Alameda from liquidation, Singh helped hide the responsibilities of the negotiating table, moving them into a secret Korean account which was not readily identifiable. This account received the same benefits as the alameda to ftx primary and secondary accounts.
Like Bankman-Fried, Singh was also entrenched in an illegal donation scheme spanning various U.S. political candidates and action committees, with his total contributions amounting to over $8 million. Much of that money now must be returned to FTX as part of its bankruptcy proceedings, as much of it is expected to be customer money.
