The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have charged FTX’s Nishad Singh with fraud. Mr Singh was a former senior executive and a co-lead engineer of FTX trading.
SEC Claim Mr Singh Defrauded Investors on FTX
The SEC charges claim that Mr Singh played a significant role in a ‘multiyear scheme to defraud equity investors in FTX’, a platform he co-founded with Sam Bankman-Fried and Gary Wang. In addition, the regulator said that he created software that allowed the unauthorised movement of FTX customer funds to Alameda Research. He also constantly deceived investors alongside other top executives at the company. ‘Bankman-Fried, with the knowledge of Singh, directed hundreds of millions of dollars more in FTX customer funds to Alameda, which were used for additional venture investments and loans to Bankman-Fried, Singh, and other FTX executives,’ the SEC explained. ‘Moreover, according to the complaint, as FTX neared collapse, Singh withdrew approximately $6 million from FTX for personal use and expenditures, including the purchase of a multi-million dollar house and donations to charitable causes,’ the regulator added.
CFTC is Charging Mr Singh with Fraud and Aiding and Abetting Fraud Committed by Sam
The CFTC is also charging the former FTX engineer with two counts of ‘fraud by misappropriation and with aiding and abetting fraud committed by Samuel Bankman-Fried, FTX, and Alameda Research LLC.’ ‘The charges against Singh are related to those in a previously filed and ongoing CFTC action against Bankman-Fried, FTX, Alameda, FTX Co-Founder Gary Wang, and Alameda Co-CEO Caroline Ellison, that alleges a fraudulent scheme causing the loss of over $8 billion in FTX customer assets,’ the CFTC stated.
Mr Singh Had Earlier Pleaded Guilty to a 6-Count Indictment by a Manhattan Federal Court
The charges by the SEC and CFTC against Nishad Singh come on the same day he pled guilty to a six-count indictment in a Manhattan Federal Court. The indictment includes charges of wire fraud, conspiracies to commit securities fraud and the violation of campaign financing laws. His guilty plea was after he made a cooperation agreement with Federal prosecutors of the Southern District of New York. According to the deal, he will become a witness for the government against Sam Bankman-Fried.