Nishad Singh, once a senior executive at the collapsed FTX crypto exchange, testified against the company’s founder, Sam Bankman-Fried (SBF). His testimony centered on the alleged misuse of hundreds of millions of dollars for buying luxury properties, investing in startups, and signing deals with celebrities. Singh recalled feeling “betrayed” upon discovering an $8 billion deficit in FTX customer accounts, suspecting that a significant portion of the missing funds financed Bankman-Fried’s lavish expenses.
SBF, 31, stands accused of orchestrating a scheme to redirect billions from FTX customer deposits to Alameda Research, another trading firm he owned. The prosecution posits that this money was not just invested in business ventures but also used for personal real estate purchases and political donations. Singh, Gary Wang, and Caroline Ellison, key figures in the FTX empire, have all pleaded guilty to fraud charges, with Singh and the others testifying about crimes they allege were directed by SBF that culminated in FTX‘s downfall.
FTX, once THE most important US crypto exchange (although headquartered in the Bahamas), provided a platform for trading various digital currencies, including its native currency, FTT. The company’s stability came under scrutiny when Changpeng Zhao (CZ), the CEO of the world’s largest crypto exchange, Binance, voiced concerns about FTX‘s financial health. This led to plummeting FTT values, triggering panic withdrawals and creating an $8 billion shortfall. FTX subsequently filed for bankruptcy.
The dramatic downturn saw SBF arrested in the Bahamas on charges of fraud and deception towards investors. He was later extradited to the U.S. for trial. Adding a layer of personal connection to the case, Singh and SBF share a long history, having known each other since adolescence. Singh, who was FTX‘s head of engineering, detailed in his testimony the influence SBF had over business decisions and described episodes of business conflicts and extravagant spending.
Singh was also implicated in a scheme wherein a group of FTX executives donated more than $90 million to political campaigns. These donations, Singh revealed, were made from loans he received from Alameda, which he later realized were funded with FTX customer deposits. The trial, which commenced on October 4, portrays SBF as the mastermind behind one of the most significant financial frauds in recent history.
