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HomeTechThird high-level FTX executive nears plea deal with US prosecutors

Third high-level FTX executive nears plea deal with US prosecutors

The former head of engineering at the collapsed cryptocurrency exchange FTX is nearing a plea deal with federal prosecutors, according to people familiar with the matter, potentially bolstering the criminal case against founder Sam Bankman-Fried.

Nishad Singh, who worked at FTX’s affiliated trading platform Alameda and then at FTX itself, would be the third high-level employee to co-operate with the government, after former Alameda chief Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to several charges in December.

News of the impending plea agreement with Singh was first reported by Bloomberg.

Ellison and Wang are expected to give evidence in the looming trial against Bankman-Fried, who faces eight criminal charges and could spend the rest of his life in prison if convicted. Bankman-Fried has pleaded not guilty.

FTX, which was once valued at $32bn, collapsed into bankruptcy in November after being unable to meet a wave of withdrawal demands from customers. Prosecutors said the collapse, which left more than 1mn potential creditors, was “one of the biggest financial frauds in American history”.

In a closed hearing in December, hours before Bankman-Fried was extradited from the Bahamas to New York, Ellison told a US federal judge that from 2019 to 2022 Alameda had access to “an unlimited line of credit on” and she “knew that it was wrong”.

Nishad Singh and Caroline Ellison
Nishad Singh, left, and Caroline Ellison, right, were both part of Bankman-Fried’s inner circle © Financial Times

She has since told prosecutors Bankman-Fried preferred to communicate using ephemeral and encrypted platforms, in order to limit the amount of evidence in potential future litigation. The government has used this testimony to argue for tighter bail conditions, which could preclude Bankman-Fried from using the internet and certain devices.

Singh, a school friend of Bankman-Fried’s younger brother, once worked as a software engineer for Facebook, before joining Alameda in 2017.

Last month, FTX sought to subpoena Singh, alongside several members of Bankman-Fried’s inner circle, as part of the exchange’s bankruptcy proceedings under way in Delaware. The court granted the request.

A lawyer for Singh and the office of the US attorney for the Southern District of New York declined to comment. A representative for Bankman-Fried declined to comment.

Bankman-Fried, who has been released on bail and is staying at his parents’ house in Palo Alto pending trial, appeared in court in New York on Thursday, after prosecutors accused of him of witness tampering for attempting to contact Ryne Miller, FTX US’s general counsel.

The former billionaire’s lawyers — who deny their client was trying to influence a witness — argued for more lax bail conditions that would allow Bankman-Fried to communicate using a variety of platforms, including direct messages on Twitter, where he has more than 1mn followers.

But Judge Lewis Kaplan, who is presiding over the case, raised the prospect of revoking Bankman-Fried’s bail if he was not satisfied that the defendant was unable to use technology to hide his communications.

A trial for Bankman-Fried is scheduled for October.

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