Former FTX CTO Pleads Guilty

Former FTX CTO Pleads Guilty

Former FTX engineering director Nishad Singh pleaded guilty to fraud while working for the bankrupt crypto exchange, Reuters reported. He also agreed to cooperate with prosecutors in an investigation into FTX founder Sam Bankman-Freed.

Singh became the third of the former FTX group executives to claim responsibility for the illegal operations that led to the collapse of the platform and the loss of millions of dollars of investors. Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty late last year.

“Nishad deeply regrets his role in this and has taken responsibility for his actions. He wants to do everything possible to make things right for the victims, including by helping the authorities,” Singh’s lawyers said.

Singh revealed that by mid-2022, he knew that Alameda was borrowing funds from FTX customers without their knowledge. He also stated that he agreed to make political donations on his own behalf, which were partially funded by transfers from Alameda, without having detailed information about the donations. In the 2022 election cycle, Singh sent $8 million to representatives of the US Democratic Party.

Singh began cooperating with the investigation in January. At the time, prosecutors were not bringing charges against him, only considering offering him a deal where he could plead guilty and cooperate in exchange for possible leniency.

On February 28, Singh pleaded guilty to fraud, conspiracy to commit fraud, conspiracy to commit money laundering, and conspiracy to defraud the United States by violating campaign finance laws. On the same day, the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) also filed fraud charges against him.

The collapse of the FTX exchange occurred in November last year after it became known that the majority of the assets of FTX-related company Alameda ($14.6 billion) were FTT tokens issued by FTX. Binance announced that it would sell its holdings to FTT, causing a domino effect in the market and leading FTX and about 130 other affiliates to file for bankruptcy.

Sam Bankman-Fried pleaded not guilty to fraud. He will appear in court on October 2, 2023. If convicted, the founder of FTX could face up to 115 years in prison.

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