Former FTX executive Nishad Singh spared prison for cooperation

Former cryptocurrency executive Nishad Singh, who once shared a $35 million penthouse with FTX founder Sam Bankman-Fried, was spared prison time by a judge for his role in the theft of about $8 billion in customer funds from the now-bankrupt exchange.

United States District Judge Lewis Kaplan ordered three years of supervised release during a hearing in Manhattan federal court on Wednesday. According to Kaplan, Singh pleaded with the prosecution and made clear about his actions in what they called one of the biggest financial frauds in US history.

Singh, who had pleaded guilty to six felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. Singh, in a plea deal with prosecutors, admitted to his role in the fraud and for serving as a “straw donor” in some of Bankman-Fried’s millions of dollars in political donations.

At the hearing, Singh told the judge, “I am overwhelmed with remorse for the harm I participated in and that I caused so many innocent people.” “I strayed so far from my values”.

Prosecutors had urged leniency for the 29-year-old Singh, FTX’s former chief engineer, in light of his cooperation. His attorneys for his defense advised him to avoid prison.

Bankman-Fried, 32, is serving a 25-year prison sentence imposed by Kaplan stemming from FTX’s November 2022 collapse.

Last month, Kaplan sentenced&nbsp, Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research, to two years in prison. The judge had also praised her cooperation, but said that such assistance was not a “get out of jail free card” in a case this serious.

The judge told Singh that his involvement “was much more limited than, certainly, Bankman-Fried and Ellison”.

During the hearing, Singh said he looked up to and supported Bankman-Fried, even after coming to see him as deceptive and self-serving.

“I still have an enormous debt to society”, Singh added.

“You did the right thing”, Kaplan told Singh. You “fully and truthfully” accused the government of wrongdoing that you knew and that they were, in my opinion, unaware of.

By describing conversations that were not otherwise documented, prosecutor Nicolas Roos claimed Singh merited praise for coming forward and implicating himself.

“It could have been very easy for Mr Singh to have denied everything”, Roos said.

He “want to correct a mistake” or at least begin making the effort to do the right thing, according to Roos.

A “monumental crime”

Before Singh’s client became aware of the scheme, Singh’s attorney Andrew Goldstein claimed that almost all of the company’s billions of dollars were stolen.

According to Goldstein, “the vast majority of the conduct that made it such a monumental crime occurred before Nishad ever became involved,” arguing that Bankman-Fried and Ellison were to blame for the decision to extort funds from FTX customers to pay Alameda’s lenders. “That was their crime. It was not Nishad’s crime”.

Goldstein said Singh’s brother, parents and fiance, among other family members, were present in court.

A 2017 graduate of the University of California, Berkeley, Singh lived with Bankman-Fried and seven other employees of FTX and its sister firm Alameda Research in a waterfront penthouse in the Bahamas, where the exchange was based.

Singh claimed to have a 6-7 percent equity stake in FTX. He claimed that, in the midst of the COVID pandemic, the price of cryptocurrencies surged to a billion dollars on paper. By October 2021, Bankman-Fried was worth $26bn, according to Forbes magazine, and gained prominence as a prolific donor to philanthropic causes and Democratic politicians.

Singh claimed during the trial that as FTX collapsed in November of that year, customers began to withdraw. He later admitted to having suicidal thoughts. He had his first meeting with federal prosecutors later that month and came back to the US shortly before the exchange declared bankruptcy on November 12 of that year.

In an hour-long conversation with Bankman-Fried on the balcony of their penthouse in September 2022, Singh testified that he had a confrontation with him about a significant lack of customer funds. Singh claimed Bankman-Fried promised to reduce costs and raise more money.

Bankman-Fried is appealing his conviction and sentence.

Source: Aljazeera