Bea Beltran Tech 02.28.2023 22:Feb PM EST

FTX Co-Founder Nishad Singh Pleads Guilty to Fraud Charges

Nishad Singh is among the associates of Sam Bankman-Fried who agreed to cooperate with authorities in the former FTX CEO's case. Singh himself has already pleaded guilty to charges of fraud and conspiracy.

Another FTX Executive Pleads Guilty

Following in the actions of fellow FTX executives Caroline Ellison and Gary Wang who pleaded guilty to fraud charges, Singh did so with six criminal counts including wire fraud, commodities fraud, securities fraud, money laundering, as well as campaign violations.

Along with a filing that shows the former executive receiving a $543 million loan from Alameda Research, he also admitted to using the funds from the crypto trading firm to make illegal donations to political candidates under his name, according to Engadget.

US attorney for the Southern District of New York Damian Williams stated that the guilty plea underscores once again that the crimes at FTX were vast in scope and consequence. He added that it "rocked our financial markets" with the multi-billion dollar fraud.

Singh's lawyers expressed that the defendant was "deeply sorry" for the role he played in the billions worth of fraud. He claims to want to make things right with the victims, as well as accept responsibility for his actions.

As part of his plea deal, the former executive's cooperation will help with the case against Sam Bankman-Fried with charges regarding the scheme of using billions of customer funds to make political donations, as well as use it for personal spending.

The cooperation could help with reducing Singh's maximum prison sentence of 75 years, given that the same day he pled guilty, the Securities and Exchange Commission and Commodity Futures Trading Commission filed civil complaints against the former FTX associate.

The Beginning of the Downfall of FTX

The cryptocurrency firm filed for bankruptcy after finding that there was $8 billion missing from its accounts, which has also affected other firms in the market. Ultimately, Bankman-Fried still pleaded not guilty but will be facing revised charges in the next months.

However, Singh admitted to knowing about how Alameda Research and FTX were misusing customer funds, and that he helped create the software code that allowed the Bankman-Fried to perform fraudulent activities, according to The New York Times.

The engineer assigned false dates to several transactions to make it appear like FTX's revenue back in 2021 was higher by $50 million. He also admitted to lying about his actions to auditors, as well as taking $6 million worth of company funds for personal use.

Reports say that around $93 million were contributed to political campaigns by FTX employees as well as others who were associated with the firm. Although, many names were used only to circumvent limits on individuals and companies.

Starting from the 2020 election, the firm gave almost $9.7 million mostly to PACs, particularly with the Democratic Party. There was also the $1.1 million to the LGBTQ Victory Fund Federal PAC and another million to a PAC that "appeared to be affiliated with pro-L.G.B.T.Q. issues."