27-year-old Indian-origin engineer Nishad Singh, a former co-lead engineer at bankrupt crypto exchange FTX, has?pleaded guilty to fraud and conspiracy charges in the US.
Singh has agreed to cooperate with prosecutors' investigation into FTX co-founder Sam Bankman-Fried.?"I am unbelievably sorry for my role in all of this," Singh said, adding that he knew by mid-2022 that Bankman-Fried's hedge fund, Alameda Research, was borrowing FTX customer funds, and customers were not aware.?
Singh said that he would forfeit proceeds from the scheme, as per a?Reuters report.
The 27-year-old 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 law.
Singh is a United States citizen and was the Head of Engineering at Alameda and, later, at FTX. He resided in Hong Kong and The Bahamas from May 2019 through November 2022.
The SEC complaint said Singh grew up in California and was a childhood friend of Bankman-Fried's brother. In 2017, Bankman-Fried and Wang founded Alameda Research LLC, a crypto asset hedge fund, and Bankman-Fried invited Singh to assist them with engineering projects, as per PTI.
Around April 2019, Singh began working with Wang to build FTX, which launched in May of that year. Although he worked primarily as an FTX engineer beginning in the spring of 2019, Singh retained his role and title as Alameda's Head of Engineering and continued to work on Alameda projects.
Singh's responsibilities and profile within both Alameda and FTX grew significantly over time, and he ultimately held the role and title of Head of Engineering at both companies. He?has consented to a bifurcated settlement, which is subject to court approval, under which he will be permanently enjoined from violating federal securities laws. SEC said Singh is cooperating with its ongoing investigation.
The Commodity Futures Trading Commission (CFTC)'s two-count complaint charges Singh with fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX Trading Ltd and Alameda.
Nishad Singh was also a shareholder and senior executive of FTX and was FTX's Director of Engineering at the time of its collapse in November 2022.
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The CFTC complaint charges that Singh personally misappropriated millions of dollars of assets, including FTX customer assets, through poorly documented "loans" from Alameda and other improper withdrawals of funds from FTX for various personal expenditures, and did so even after Singh knew or should have known the source of those assets was, at least in part, FTX customer assets.
Singh does not contest his liability on the CFTC's claims, and has agreed to the entry of a proposed consent order of judgment as to his liability on the charges in the complaint, CFTC said.
SEC Chairman Gary Gensler had said in December last year that Bankman-Fried 'built a house of cards' on a foundation of deception while telling investors that it was one of the safest buildings in crypto.
The alleged fraud committed by Bankman-Fried is a 'clarion call to crypto platforms that they need to come into compliance with our laws,' Gensler had said.
Bankman-Fried, FTX's founder, had pleaded not guilty to eight criminal charges filed against him in December. Prosecutors say he stole billions in FTX customer funds to plug losses at Alameda. He has acknowledged inadequate risk management but says he did not steal funds.
This came after Sam apologized and tweeted to say 'I am sorry' in November 2022 when FTX's collapse began. He faces up to 115 years in prison if all charges against him get proven.
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