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Another former executive at cryptocurrency exchange FTX, now bankrupt, has pleaded guilty to criminal charges in the United States, adding to the pressure on the disgraced Sam Bankman-Fried as he prepares for trial.
At a Manhattan court hearing on Tuesday, Nishad Singh, a former FTX engineering director, pleaded guilty to six criminal counts of fraud and conspiracy stemming from the exchange’s implosion last year.
The plea deal was another sign that prosecutors are turning to members of Bankman-Fried’s inner circle, after he was indicted in December on eight counts of fraud and conspiracy.
Prosecutors say he siphoned off billions in FTX client deposits to cover losses at his Alameda Research hedge fund, and lied to investors and lenders about the financial condition of his companies.
Bankman-Fried has pleaded not guilty and her attorney Mark S. Cohen did not immediately respond to a DailyMail.com request for comment Tuesday morning.
Nishad Singh, the former head of engineering at now-bankrupt cryptocurrency exchange FTX, has agreed to plead guilty to the US criminal charges, his lawyer has said.
Sam Bankman-Fried, the founder of FTX, was charged in December with eight counts of fraud and conspiracy. He has pleaded not guilty to the charges.
Singh pleaded guilty to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws.
US District Judge Lewis Kaplan, who will also oversee Bankman-Fried’s trial scheduled for October, accepted the guilty plea.
Federal prosecutors in Manhattan have repeatedly urged people with knowledge of wrongdoing at FTX to come forward, and Singh’s statement comes after two other former executives agreed in December to cooperate with prosecutors.
Caroline Ellison, Alameda’s chief executive, and Gary Wang, FTX’s chief technology officer, pleaded guilty to seven and four criminal charges, respectively.
FTX’s former lead lawyer, Daniel Friedberg, has also cooperated with prosecutors but has not been told he is under criminal investigation, a person familiar with the matter told Reuters in early January.
Several other former FTX executives have also retained attorneys to discuss possible cooperation with prosecutors.
Singh was close friends with Bankman-Fried’s younger brother in high school, Bankman-Fried wrote in a since-deleted blog post.
After working at Alameda, Singh became FTX’s director of engineering in 2019, according to CNBC.
In 2020, Singh modified FTX’s software to exempt Alameda from automatically selling its assets if it was losing too much borrowed money, Reuters reported in December.
The waiver allowed Alameda to continue borrowing from FTX regardless of the amount of collateral securing its loans.
FTX co-founder Gary Wang (left) and former Alameda Research CEO Caroline Ellison (right) have pleaded guilty to criminal charges in connection with the scandal.
“Be very careful not to liquidate,” Singh wrote in a comment on the platform’s code, which was seen by Reuters.
The US Securities and Exchange Commission, which filed civil fraud charges against Bankman-Fried, said the code change gave Alameda a “virtually unlimited line of credit” in FTX.
He also said that the billions of dollars FTX secretly lent Alameda over the next two years came from FTX clients.
Bankman-Fried, 30, experienced a boom in the values of bitcoin and other digital assets to amass an estimated net worth of $26 billion and become an influential US political donor.
Singh also became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.
Last week, Bankman-Fried was indicted on new criminal charges in an expanded indictment that charged him with conspiring to make more than 300 illegal political donations.
Bankman-Fried now faces 12 criminal charges, including four for fraud and eight for conspiracy, up from eight counts in a previous indictment, to which he has pleaded not guilty.
The new indictment alleges that Bankman-Fried conspired with two former FTX executives, including Singh, to covertly donate tens of millions of dollars to influence lawmakers to pass laws favorable to the company.
Those donations were illegal because they were made with “fake” donors or corporate funds, allowing Bankman-Fried, one of the biggest donors to Democrats in the 2022 midterm elections, to evade contribution limits, the officials said. prosecutors.
Prosecutors said Bankman-Fried directed Singh, whose name was not identified in the indictment, to donate primarily to left-wing candidates and organizations and the other executive to Republicans, with many donations financed by Alameda and including funds from FTX clients.
The indictment alleges that a political consultant working for Bankman-Fried told Singh that ‘you are the centre-left face of our spending will mean you are giving [donations] to a bunch of waking shit for transactional purposes.
Singh, identified in court documents only as CC-1 (Co-Conspirator 1), gave more than $1 million to a pro-LGBTQ group under the direction of Bankman-Fried, according to the indictment.
Federal Election Commission records confirm that Singh contributed $1.1 million on July 7, 2022, to the LGBTQ Victory Fund, a national organization dedicated to openly electing LGBTQ people.
FTX collapsed in November amid a spate of client withdrawals over concerns the exchange was mixing assets with Alameda.
When it became clear that FTX could not meet the withdrawal demands, Bankman-Fried ordered Alameda to sell assets to pay off exchange clients, prosecutors said.
The superseding indictment said that on Nov. 6, five days before FTX’s bankruptcy filing, Bankman-Fried sent Singh a message from Caroline Ellison, then Alameda’s chief executive.
“I had a growing dread of this day that weighed on me for a long time,” Ellison wrote, “and now that it’s actually happening, it feels great to end it one way or another.”