Former FTX Director to reportedly plead guilty to fraud charges

Nishad Singh has reportedly agreed to plead guilty to one count of wire fraud, one count of conspiracy to commit wire fraud on FTX customers, and one count of conspiracy to commit commodities fraud.

Nishad Singh, former director of engineering at FTX, is expected to plead guilty to fraud charges brought by U.S. prosecutors who are investigating the now bankrupt FTX cryptocurrency exchange, Reuters reported on Feb 28.

During the hearing in a Manhattan federal court, Singh’s lawyer announced that his client had agreed to plead guilty to one count of wire fraud, one count of conspiracy to commit wire fraud on FTX customers, and one count of conspiracy to commit commodities fraud.

Nishad Singh, the former director of engineering at now-bankrupt crypto exchange FTX, has agreed to plead guilty to U.S. criminal charges, his lawyer said in court, as U.S. prosecutors ramp up their probe into members of Sam Bankman-Fried’s inner circle https://t.co/KinlD4h4Zj pic.twitter.com/8UFekP2XF5

— Reuters Legal (@ReutersLegal) February 28, 2023

According to CNBC, Singh was a close friend of Bankman-Fried’s younger brother in high school and became FTX’s director of engineering in 2019. In 2020, Singh allegedly altered FTX’s software to allow Alameda, a firm where he had previously worked as chief executive, to avoid automatic asset sales when it was losing too much borrowed money. This exemption allowed Alameda to continue borrowing from FTX regardless of how much collateral secured its loans, according to Reuters. The U.S. Securities and Exchange Commission has alleged that this code change gave Alameda a „virtually unlimited line of credit“ at FTX, and that the billions of dollars FTX lent Alameda over the next two years came from FTX customers.

Singh, who was absent from public view for an extended period compared to other FTX executives, emerged in early January to participate in a proffer session at the Southern District of New York’s United States Attorney’s office. During a proffer session, the person providing information may be given partial protection to divulge their insights to the prosecutors.

Singh’s plea comes after a number of Bankman-Fried’s close associates have reportedly agreed to cooperate with prosecutors in recent months.

In December 2022, Cointelegraph reported that former executives of FTX and Alameda Research Caroline Ellison and Gary Wang plead guilty to fraud charges, and are cooperating with the Justice Department’s investigation on the former FTX CEO, Sam Bankman-Fried.

Former FTX CEO Sam “SBF” Bankman-Fried has pleaded innocent to eight federal charges and is currently living with his parents in California. Bankman-Fried’s criminal trial in federal court is scheduled to begin in October, while FTX’s bankruptcy case is ongoing in U.S. Bankruptcy Court for the District of Delaware.