FTX Co-Founder Nishad Singh Pleads Guilty in Fraud Investigation

Singh also attributed fraudulent dates to a series of transactions to make it look like FTX’s 2021 revenue was $50 million higher than it was, SEC says, then lied about the scheme to auditors . And last September and October, according to the complaint, he withdrew about $6 million from FTX for his personal use, spending the money on charitable donations and a multi-million dollar home, despite knowing that the FTX client funds were misappropriated.

FTX filed for bankruptcy in November after the crypto equivalent of a bank run exposed an $8 billion hole in its accounts. Its implosion was the worst moment in a year-long crypto industry meltdown that sent the market skyrocketing and cost investors billions of dollars in lost deposits.

The FTX investigation has gained momentum in recent weeks. On Thursday, federal prosecutors announced a revised indictment against Mr. Bankman-Fried that included several new charges and detailed the alleged scheme to defraud clients and investors and funnel tens of millions in illegal campaign contributions to political candidates and political action committees.

Mr Bankman-Fried pleaded not guilty in January to the original indictment and is expected to return to court in the coming months to face trial on the revised charges, according to a court filing. A spokesperson for Mr. Bankman-Fried declined to comment.

Mr. Singh is a graduate of the University of California at Berkeley. He worked as a software engineer in Facebook’s applied machine learning team, then joined Alameda, the crypto hedge fund Mr. Bankman-Fried founded and owned. Mr. Singh was also a close friend of Mr. Bankman-Fried’s younger brother, Gabe, who ran Guarding Against Pandemics, an organization that received much of its financial support from FTX.

In 2019, Mr. Bankman-Fried, Mr. Wang and Mr. Singh founded FTX in Hong Kong, before moving the business to the Bahamas two years later. The three founders and Ms. Ellison were active in the Effective Altruism Movement, a brand of philanthropy that urges donors to use data to maximize the long-term impact of their giving. They all served on the board of the FTX Foundation, Mr. Bankman-Fried’s philanthropic operation, and lived together in a luxurious penthouse in Albany, a resort town on the Bahamian island of New Providence.

As FTX grew, Mr. Bankman-Fried became its public face while Mr. Wang and Mr. Singh were crucial behind the scenes, responsible for writing software code for FTX.