FTX Co-Founder Nishad Singh Pleads Guilty in Fraud Investigation

Nishad Singh, a founder of FTX, has pleaded guilty to criminal charges and has agreed to cooperate with prosecutors investigating Sam Bankman-Fried.

A former high-ranking colleague of Sam Bankman-Fried on Tuesday became the third person to plead guilty to criminal charges stemming from the collapse of the cryptocurrency exchange FTX and to agree to cooperate with federal prosecutors.

Nishad Singh, 27, a founder of FTX who later served as director of engineering for the company, pleaded guilty to charges of wire fraud, commodities fraud, securities fraud, money laundering and campaign financial offences. The plea requires him to work with federal prosecutors as they pursue the billion dollar fraud case against Mr. Bankman-Fried.

" Today's guilty plea underscores once again that the crimes at FTX were vast in scope and consequence,” Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement. They've rocked our financial markets with a multi-billion dollar fraud. And they've corrupted our politics with tens of millions of dollars in illegal contributions to straw campaigns. That "Nishad is deeply sorry for his role in this and has accepted responsibility for his actions." Mr Singh wants to help the government and "make things right for the victims", according to the statement.

The charges against Mr. Singh face a maximum prison sentence of 75 years, although as plea deals often result in significantly reduced sentences.

His cooperation increases the pressure on Mr Bankman-Fried, 30, who has been accused of having orchestrated a scheme to use billions in customer deposits to fund political contributions, fund more than 300 businesses, and cover other lavish expenses. Mr Bankman-Fried was extradited to the United States on December 21 after his arrest in the Bahamas, where FTX was based. That night, federal prosecutors announced that two executives close to him, Gary Wang and Caroline Ellison, were cooperating with the investigation and had pleaded guilty to fraud.

Mr. Singh was a key figure at FTX who worked closely with Mr. Bankman-Fried, Mr. Wang and Ms. Ellison. In the plea agreement, authorities said Mr. Singh had knowledge of or participated in an effort “to artificially inflate FTX’s earnings,” and that he provided false or misleading information to listeners and to regulators.

ImageNishad Singh, the former Director of Engineering at FTX.< /figure>

On Tuesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission also filed civil complaints against Mr. Singh. The complaints stated that he knew that FTX and its sister hedge fund, Alameda Research, misused client funds and that he helped create software code that enabled the fraud.

According to the S.E.C., Mr. Singh also assigned fraudulent dates to a series of transactions to make it appear that FTX's 2021 revenue was $50 million higher than it was, then lied about the scheme to listeners. And last September and October, according to the complaint, he withdrew about $6 million from FTX for his personal use, spending the money on charitable donations and a multi-million dollar home, despite knowing that the funds from FTX clients were misappropriated.

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