FTX’s Singh pleads guilty as pressure mounts on Bankman-Fried

NEW YORK, Feb 28 (Reuters) – Nishad Singh, the former director of engineering at now-declared cryptocurrency exchange FTX, pleaded guilty to US criminal charges on Tuesday and agreed to cooperate with prosecutors’ investigation into FTX’s establishment Sam Bankman-Fried.

“I regret my role in all of this,” Singh said, adding that he knew in mid-2022 that Bankman-Fried’s hedge fund, Alameda Research, was taking money from FTX clients, and that clients they don’t know. Singh said he would lose the money he got from the scheme.

Bankman-Fried, the founder of FTX, pleaded not guilty to an eight-count indictment filed against him in December. Prosecutors say he stole billions in FTX customer funds to cover losses in Alameda. He admitted to inadequate risk management, but said he did not steal any money.

Singh, 27, pleaded guilty to one count of wire fraud, three counts of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States through wire fraud. breaking campaign finance laws.

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He traveled from the Bahamas shortly after the FTX hack in November in part to help the U.S. investigation, prosecutor Danielle Sassoon said during Tuesday’s hearing. He was released on $250,000 bond.

Bankman-Fried, 30, now faces 12 felony charges after prosecutors unsealed a new charge against him last week. A spokesman for Bankman-Fried declined to comment.

Singh is the third person close to Bankman-Fried to plead guilty and cooperate with the investigation. Caroline Ellison, Alameda’s president, and Gary Wang, FTX’s chief technology officer, pleaded guilty in December to seven and four counts, respectively.

In a statement released by Singh’s lawyers, Andrew Goldstein and Russell Capone, “He wants to do everything he can to make things right for the victims, including helping the government to the best of his ability.”

Separately on Tuesday, the US Securities and Exchange Commission and the Securities and Exchange Commission filed charges against Singh.

‘Straw’ donors

Bankman-Fried rode the value of bitcoin and other digital assets to amass an estimated net worth of $26 billion and became an influential American political donor.

Singh has also become a major donor to Democratic politicians, donating $8 million to the 2022 election campaign, according to OpenSecrets.

In new charges filed last week, prosecutors say Bankman-Fried conspired with two former FTX executives to donate tens of thousands of dollars to influence their congressmen. pass the law that is relevant to the company.

The contributions were illegal because they were made with donor or corporate funds, prosecutors said. They said Bankman-Fried directed a senior FTX executive, named CC-1, to donate more than $21 million to a pro-LGBT organization.

Federal Election Commission records show that Singh donated $1.1 million on July 7, 2022 to the LGBTQ Success Fund, a national organization dedicated to openly voting for LGBTQ people.

Singh said in court in 2022 that he agreed to make political contributions in his name that were partially made through transfers from Alameda, without providing details of the contributions. He said that while he accepted the political opinion of those he donated to, he did not choose candidates.

Singh was Bankman-Fried’s younger brother’s best friend in high school, Bankman-Fried wrote in the since-deleted post.

Damian Williams, the top federal prosecutor in Manhattan, said in a statement, “Today’s guilty plea reaffirms that the crimes committed at FTX were widespread and consequential.”

“They rocked our financial markets with multi-billion dollar fraud. And they destroyed our politics with millions of dollars in illegal campaign contributions.”

Luc Cohen and Jody Godoy report in New York; Edited by Matthew Lewis and Bill Berkrot

Our position: Thomson Reuters Credentials.

Jody Godoy

Thomson Reuters

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

Luc Cohen

Thomson Reuters

Reports on New York federal courts. He previously worked as a representative in Venezuela and Argentina.

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