Third person in Sam Bankman-Fried’s inner circle to plead guilty in FTX fraud investigation

A third person from Sam Bankman-Fried’s inner circle is willing to take a plea deal with prosecutors for alleged fraud at the crashed FTX crypto exchange.

Nishad Singh, the bankrupt firm’s former head of engineering, will reportedly join former Alameda boss Caroline Ellison and FTX co-founder Gary Wang in cooperating with prosecutors.

The plea deal could see Singh provide intimate details about Bankman-Fried’s past business dealings ahead of their upcoming fraud trial, in which Ellison and Wang are also expected to testify.

The former billionaire, who has pleaded not guilty, faces more than 100 years behind bars for a litany of criminal charges related to the collapse of FTX.

The deal with Singh, first reported by Bloombergcould see Bankman-Fried further isolated as he tries to fight the charges against him.

Caroline Ellison began her business career at Jane Street, a New York-based firm, in 2018 before moving to Alameda Research in 2020 after meeting Bankman-Fried. She is among her former inner circle and is now said to be cooperating with prosecutors in a case against her.

Gary Wang joined Ellison in pleading guilty to fraud charges, and is expected to testify in the upcoming Bankman-Fried trial.

Sam Bankman-Fried has pleaded not guilty to eight criminal charges related to the collapse of his cryptocurrency empire.

Singh has reportedly spent the past few months negotiating a deal with Manhattan prosecutors as they continue to build their case against Bankman-Fried.

The charges against him stem from the November implosion of his cryptocurrency empire, once valued at more than $30 billion.

Prosecutors allege he orchestrated a multi-year fraud campaign that stranded more than a million potential creditors, in what they called “one of the largest financial frauds in United States history.”

They claim Bankman-Fried ran a year-long scam that saw him embezzle billions in FTX client funds to pay for extravagant personal expenses, political donations, and prop up the books of affiliated crypto trading firm Alameda Research.

As FTX’s head of engineering, Singh was instrumental in the company’s day-to-day operations.

He also had a front row seat to Bankman-Fried during the years he was allegedly the mastermind of the scam, as he lived with him in a penthouse in the Bahamas.

A former Facebook employee, Singh was hired at FTX’s sister company Alameda Research in 2017 before founding FTX two years later with Wang and Bankman-Fried.

Singh, a school friend of Bankman-Fried’s younger brother, was cited last month along with several other FTX members as part of the company’s bankruptcy proceedings, which are underway in Delaware.

One of the accusations leveled against Bankman-Fried is that she violated campaign finance laws, and Singh is seen as someone with valuable knowledge of this claim after she personally gave more than $9.3 million to Democrats since 2020.

It is believed that if he were to cooperate with prosecutors, he could provide key information about FTX’s dealings with political candidates.

Singh is also reportedly facing potential charges from regulators, including the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC), for his role in the alleged fraud.

Singh reportedly attended a ‘bidding session’ with Manhattan prosecutors in January, allowing people to share information under limited immunity.

A person’s cooperation in a bidding session does not necessarily lead to a plea deal.

Singh was a school friend of Bankman-Fried’s younger brother and a Facebook employee before his involvement with FTX.

Bankman-Fried, pictured leaving Manhattan Federal Court on February 16, 2023, could be jailed for more than 100 years if convicted

Bankman-Fried was ordered to appear before a judge again this month after reports that he violated the conditions of his bail, including using a VPN to use the internet and contacting FTX’s former general counsel.

The high-profile case against Bankman-Fried has already seen two members of his inner circle turn on him.

Hours before Bankman-Fried was to be extradited to New York from his FTX hideout in the Bahamas, Caroline Ellison told a US federal judge that his Alameda Research trading fund was central to the alleged scam.

He revealed that from 2019 to 2022, his company had “an unlimited line of credit at FTX.com,” adding that he “knew it was wrong” at the time.

According to bankruptcy court documents, Alameda Research also awarded Singh hundreds of millions of dollars in loans.

Ellison told prosecutors that Bankman-Fried anticipated that her actions could become the target of criminal investigations and preferred to communicate using encrypted platforms to limit future evidence collection.

Following the collapse of her billion-dollar fortune, Bankman-Fried has been living at her parents’ home in California. He was released late last year on $250 million bail, the largest bail in US history.

But he was brought before a judge again this month after he violated his bail conditions, including using a VPN to access the internet and contact former FTX general counsel.

He is alleged to have orchestrated one of the most egregious financial scams in history. Charges he has pleaded not guilty include wire fraud and money laundering conspiracy, and if convicted he could be jailed for up to 115 years.

Bankman-Fried became one of the most powerful political donors in the United States after amassing a net worth of $26 billion through digital currencies, including Bitcoin.

But his empire collapsed in November amid a cash crunch, which was fueled by claims the 30-year-old was misusing Alameda Research.

Alameda, at the direction of Bankman-Fried, is alleged to have stolen customer deposits to finance numerous financial activities, including luxury real estate purchases and political donations.

The funds were also reportedly used to shore up financial losses on Alameda’s books.

Last month, federal prosecutors seized nearly $700 million tied to the FTX founder, leading him to appear to have dumped various assets.

His fundraising efforts included the sale of a multimillion-dollar Washington D.C. townhouse owned by his brother, which hit the market for $3.28 million.

Bankman-Fried’s brother, Gabe, was a Wall Street trader and a Democratic congressional staffer before he established a nonprofit organization called Guarding Against Pandemics.

The townhouse, which was partially funded by the FTX founder, was reportedly used for dining and wine drinking for notable Washington politicians, while the crypto giant contributed to his political funds.

However, following the collapse of its cryptocurrency empire, the company has called on hundreds of US politicians who received donations from FTX to refund the contributions.

Political heavyweights who benefited from Bankman-Fried’s contributions include Nancy Pelosi, Kevin McCarthy, Mitt Romney and Paul Ryan.

Now they face being sued by the company if they don’t repay FTX, as the embattled company tries to repay its estimated 1 million creditors.