FTX’s Nishad Singh accuses SBF of misappropriating customers’ cryptos

Nishad Singh

Nishad Singh – former FTX chief engineer

Ex-executive of the exchange FTX and close to its founderNishad Singh testified during the trial from Sam Bankman Friedrecognizing theuse of funds from users in favor ofAlameda.

Nishad Singh pleaded guilty, as did the other members of Sam Bankman-Fried’s inner circle. Like Gary Wang and Caroline Ellison, Singh had knowledge of the malpractices carried out by the ex-CEO.

The former executive of crypto exchange FTX said as much on the stand as the founder’s criminal trial enters its third week. And once again, it’s damning testimony for SBF.

The 8 billion of discord: from admiration to shame

As Exchange’s Director of Engineering, Nishad Singh was aware of a “hole”, a “huge hole”, in the company’s finances. This was in 2021. The hole amounted to around $8 billion.

These funds came from customer deposits and were used to fuel the operations of the group’s trading company: Alameda Research. Singh claims to have become aware of these facts during a discussion with the CEO, who has been a friend of his since they were students.

The executive also confirms that the funds were used by Alameda to finance risky investments, but also political donations, real estate purchases and so on.

Abuses as early as 2019

For the prosecutors, this new testimony places the entire responsibility on SBF’s shoulders.

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Singh testifies: Bankman-Fried paid little heed to the objections of other team members. In particular, these investments were intended to enable him to approach celebrities, politicians and other influential people.

SBF allegedly injected Alameda’s $200 million into K5 Global, a venture capital firm, enabling him to attend one of his boss’s Super Bowl parties, attended by Hillary Clinton and Jeff Bezos among others.

But for the prosecution witness, the bad practices go back much further. Nishad Singh first worked for Alameda, before FTX was created. The company’s bank accounts were subsequently used to store funds for the exchange, which had difficulty opening its own accounts.

And if he had knowledge of this, it’s for the simple reason that Singh personally programmed systems in 2019 to route user deposits to Alameda bank accounts.

Singh testifies, tells of his admiration for SBF, and how this feeling will gradually turn to shame following the discovery, in September 2022, that FTX executives were enriching themselves with customer funds.

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