Former FTX’s head of engineering Nishad Singh spills the beans over reckless expenditure of customers’ funds by Sam Bankman-Fried. He also admits to being part of these crimes.
During his trial at the Manhattan Federal court on Monday, October 16, FTX chief of engineering Nishad Singh disclosed the reckless spending by SBF and his associates. Singh said that FTX under the disgraced founder Sam Bankman-Fried spent huge sums of money on real estate, campaign donations, celebrity endorsements, and venture investments.
Nishad Singh’s testimony comes just days after SBF’s ex-girlfriend Caroline Ellison testified last week. She disclosed how FTX’s sister company Alameda Research improperly used huge sums of customers’ funds.
Similar to Ellison, Singh is collaborating with the prosecution under the terms of a plea agreement he entered into in February. At that time, Singh admitted guilt on six charges, including conspiracy to engage in securities fraud, conspiracy to commit money laundering, and conspiracy to violate campaign finance regulations.
In response to inquiries from Assistant US Attorney Nicolas Roos, Singh stated that he regularly communicated with Bankman-Fried to express his concerns regarding the company’s expenditures. Singh informed the court that he would convey his feelings of being “embarrassed” and “ashamed” to Bankman-Fried. He further asserted that the spending levels appeared excessive and ostentatious.
Commenting on the technology implementation at FTX and Alameda, Singh said that “Sam didn’t code himself, but he was very involved in the coding process” and the minutiae of the architecture. “Sam designed all the rules for the margin system and the liquidation engine,” which were also “core to FTX”.
FTX’s Billion-Dollar Investments, Political Donations, Etc.
The court presented a 2021 investment spreadsheet, which outlined significant allocations. Notable entries included a $1 billion investment in Genesis for a mining company, $499 million in the startup Anthropic, and $200 million directed towards the investment firm K5.
Singh expressed particular concern about the K5 allocation. He mentioned that Bankman-Fried provided a term sheet detailing substantial bonuses for the owners, Michael Kives and Bryan Baum. Singh raised these concerns following Bankman-Fried’s attendance at a K5 dinner, attended by prominent figures like Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Kris and Kylie Jenner.
Singh reported that he conveyed his concerns to Bankman-Fried, stating that the K5 investment seemed “value extractive.” He also inquired whether the investment was made with Bankman-Fried’s personal funds rather than FTX’s, as the spreadsheet indicated the source was Alameda.
Before the court recessed on Monday, the jury received a separate spreadsheet detailing celebrity sponsorship deals, encompassing a $205 million commitment for the FTX Arena in Miami, $150 million directed towards Major League Baseball, $28.5 million for Stephen Curry, $50 million for Tom Brady and Giselle Bundchen, and $10 million for Larry David. The total value of these deals listed on the spreadsheet amounted to $1.13 billion.
Singh admitted that even after becoming aware that customer funds were involved in FTX’s expenditures, he continued to give explicit and implicit approval for these transactions.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Source: https://www.coinspeaker.com/ftx-chief-engineer-spending-sbf/