Image Source: Bloomberg
Another top manager at the cryptocurrency company FTX, which went out of business, has pleaded guilty to criminal charges in the US.
On Tuesday, Nishad Singh, who used to be the head of engineering, admitted to six charges, including three counts of conspiring to commit fraud.
The plea comes after Sam Bankman-Fried, the founder of FTX, was charged with 12 crimes, which he denies.
Last year, FTX went bankrupt, which made it hard for many users to get their money back.
Prosecutors say that Mr. Bankman-huge Fried’s scheme caused the fall. As a result, he has been freed on a $250 million bond while he waits for his trial.
Mr. Bankman-Fried was once known as the “King of Crypto,” but he is now being accused of sending customer deposits at FTX to his hedge fund, Alameda Research, where they were used for political donations, buying property, and other investments.
Mr. Singh was a friend of Bankman-brother Fried’s when they were kids. He worked at Alameda Research and was later on the team that started FTX.
Like Bankman-Fried, he had given much money to political campaigns over the past few years.
According to court documents, he wrote the software code that gave Alameda special treatment on the FTX platform and helped Bankman-Fried backdate financial transactions to make FTX’s financial performance look better than it was.
In the filings, it was said that the 27-year-old knew that Bankman-Fried was transferring FTX customer funds at a time when the company was in a bad spot after the crash of crypto prices in 2022.
According to the documents, Singh took out $6 million for his use and spending in 2022, as the company was about to go bankrupt in November.
Singh, who is also facing criminal and civil fraud charges from financial regulators, said, “I am so sorry for my part in all of this.”
During the hearing, he said he would give back all the money he got from the scheme.
In December, two other top members of Bankman-management Fried’s team, Caroline Ellison, the former CEO of Alameda, and Gary Wang, the former CTO of FTX, both pleaded guilty.
Officials said that Mr. Singh was now helping with the investigation of Mr. Bankman-Fried by prosecutors.
Sam Bankman-Fried is being charged with four new crimes
Four new criminal charges have been brought against the former boss of the crypto exchange FTX, which went out of business. The charges say he worked with others to make illegal political donations and commit bank fraud.
Sam Bankman-Fried has already said that he is not guilty of stealing money from customers and investors.
Last year, FTX went bankrupt, which made it hard for many users to get their money back.
Mr. Bankman-Fried is now being charged with 12 crimes.
A representative for Mr. Bankman-Fried wanted to refrain from saying anything.
In the most recent charges, Mr. Bankman-Fried was accused of working with two other former FTX executives to give tens of millions of dollars to US politicians to get them to pass laws that helped the company.
Prosecutors say that the donations were made by “straw” donors or with money from corporations. This let Mr. Bankman-Fried get around contribution limits, they say.
They said that Mr. Bankman-Fried told one executive to give money to candidates on the left and the other to candidates on the right. Many of the donations were made with money from his Alameda Research hedge fund and FTX customer funds.
Bankman-Fried has already said he is not guilty of using customer deposits at FTX to pay for Alameda Research, buy property, and give money to politicians.
After being arrested in December, he was freed on a $250 million (£208 million) bail package.
But if he is found guilty, he could spend over 100 years in prison.
The trial date was set for October 2 by Judge Lewis Kaplan.
FTX did the crypto industry “incalculable” damage
The collapse of FTX last fall was a black eye for crypto. It hurt the legitimacy and trustworthiness of the young industry. Emin Gün Sirer, CEO and Founder of Ava Labs, says that this damage is huge.
Sirer said that he had seen the digital assets industry “bloom from nothing” into what it is today. He also said that as a computer science professor at Cornell University, he worked hard to help people learn about blockchain technology by briefing politicians and holding workshops.
Sirer said that the fact that Bankman-Fried set the industry back so far keeps him up at night. However, he is also aware of the changing tides in regulatory circles, which could be “very bad” for those who work in crypto.
As the prices of digital assets plummeted last summer, FTX founder Sam Bankman-reputation Fried’s went through the roof. The 30-year-old was compared to John Pierpont Morgan in 1907 for rushing to save crypto firms in trouble.
But when FTX went down last November, Bankman-reputation Fried’s went the other way. After a sharp drop in FTX’s FTT token caused a run on the exchange, the company filed for bankruptcy. This was because FTX did not have enough reserves of customer assets to cover withdrawals.
Read Also: FTX new boss John Ray to rescue crypto firm
Sirer said that Bankman-Fried wasn’t questioned because of how he presented himself. He had “tousled hair” and spent so much on marketing that the world thought he was a genius who couldn’t be questioned.
Sirer said that the best way to deal with the effects of FTX’s failure, which caused the failure of dozens of other companies and projects, is to have a good conversation with regulators.
