FTX News: According to allegations made by the U.S. Securities and Exchange Commission (SEC), a person who formerly worked as the director of engineering at FTX was “an active participant” in a scheme to deceive several crypto investors. Reports suggest that he withdrew millions of dollars from the crypto exchange for his own personal use.
Nishad Singh Pleads Guilty To Charges
Nishad Singh, the former FTX director, has pleaded guilty to fraud charges brought by U.S. prosecutors who are probing the now-defunct FTX conglomerate. During the proceeding that took place in a federal court in Manhattan, Singh’s attorney pointed out that his client had reached an agreement to enter a guilty plea to one count of wire fraud, one count of conspiracy to commit wire fraud related to FTX customers and one count of conspiracy to commit commodities fraud.
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The SEC asserts that Singh was “an active participant” in a scheme to mislead FTX’s investors and went to great lengths to extract approximately $6 million from FTX for his own personal use. These included the purchase of a “multi-million dollar mansion” and contributions to charity organizations. Regarding the accusations brought by the SEC, Singh has reportedly agreed to a bifurcated settlement, which is currently awaiting clearance from the court.
According to reports, Singh was a close confidant of Bankman-Fried’s younger brother when they were in high school. In 2019, Singh was promoted to the position of director of engineering at FTX, and the following year, Singh allegedly modified the core software of FTX exchange in order to enable Alameda Research — a company for which he had previously served as chief executive — to dodge automatic asset sales while the company was losing an excessive amount of money that had been borrowed. Because of this exception, Alameda was able to continue borrowing money from FTX regardless of the collateral that was used to secure its loans.
From Allies To Enemies
Following a number of Bankman-Fried’s close acquaintances apparently agreeing to cooperate with authorities in recent months, Singh has now pleaded guilty to the charges levied against him. Caroline Ellison and Gary Wang, two former executives of FTX and Alameda Research, pleaded guilty to fraud charges in December 2022 and are currently working with the Department of Justice to assist in investigating FTX founder Sam Bankman-Fried.
The court has placed Bankman-Fried under house arrest with a bond set at $250 million as he awaits his trial scheduled to begin in October. As things currently stand, Bankman-Fried has pleaded “not guilty” to all counts of charges, but if found guilty, SBF could face a sentence of 115 years in prison.
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