SBF Inner Circle Shrinks as Former FTX Engineer Pleads Guilty to Fraud Charges

Former ftx engineering director Nishad Singh pleads guilty to fraud charges, becoming Bankman-fried's last remaining lieutenant to surrender.

Singh pleaded guilty to six counts before a Manhattan court on February 28, 2023, including conspiracies of money laundering and electronic fraud, and electronic fraud.

Singh would have ordered Coders to ignore the liquidation of Alameda.

Singh reportedly advised FTX programmers not to liquidate the loan positions of the subsidiary FTX Alameda Research in a commentary incorporated into the FTX code.  

FTX is a bankrupt Bahamian crypto exchange co-founded by disgraced former CEO Sam Bankman-Fried (SBF) who faces criminal charges for, among other things, fraudulently extending a multi-billion dollar credit line to Alameda.

“Be extra careful not to liquidate,” wrote Singh in the code’s comments, according to documents seen by Reuters

Programmers seed code with comments to inform readers what action a certain section of code performs. The comments also prevent code owners from breaking the features provided by changes. Singh's comment would have informed anyone now the ftx code to enable alameda to continue borrowing from ftx, even though market loans have become underfunded. 

In their latest indictment against SBF, prosecutors mentioned the alleged code manipulation that Singh may have taken part in. 

That the SBF "has created secret loopholes [...] that have allowed Alameda to contract a negative balance of several billion dollars on the FTX."

The previous president dismissed all criminal charges. He has now been released from prison under the terms of a bail contract.

Singh may face a 75-year prison sentence.

Singh faces up to 30 years in prison for electronic fraud should he be convicted. The severity of the sentence depends on the circumstances, such as the amount of money lost and the number of victims. Another 40 years for accusations of money laundering and electronic fraud.

Gary Wang, who was the technical director of the FTX, faces a 50-year sentence after pleading guilty to four conspiracy charges and fraud charges. 

Caroline ellison, who was the co-PDG of Alameda since 2021 but was dismissed when ftx went bankrupt last year, risk up to 11 decades of imprisonment after pleading guilty to multiple counts of conspiracy.

Wang and ellison entered into plea agreements in order to assist prosecutors in their case against bankman-fried. If the courts find these comments useful, the couple can serve reduced sentences.