Who is Nishad Singh, Indian-origin engineer at FTX who plead guilty to fraud charges

A crypto asset trading platform engineer of Indian descent, 27, entered a guilty plea to charges of commodities fraud. The former co-lead engineer at FTX Trading Ltd. Nishad Singh is being prosecuted by the federal government for his participation in a long-running scam to defraud equity investors in FTX, the cryptocurrency trading platform Singh founded with Samuel Bankman-Fried and Gary Wang.

Singh entered guilty plea to commodities fraud and other offences

In the separate, parallel case brought against Singh in the Southern District of New York, Singh entered a guilty plea to commodities fraud as well as other offences.

Despite false representations by Bankman-Fried to investors that FTX was a secure crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges, Singh allegedly created a software code that allowed FTX customer funds to be diverted to Alameda Research, a crypto hedge fund owned by Bankman-Fried and Wang.

According to the complaint, Singh knew or should have known that these representations were deceptive and fraudulent.

Ascent to the inner circle

Reportedly a housemate of SBF, Singh started off as an intern with Facebook in 2016 and graduated with a Bachelor of Science from California’s Berkeley University in 2017. He then joined Facebook as a software engineer and worked there for five months. He had been Director of Engineering at FTX since 2019, and had been working with SBF at Alameda Research in the same role befor that.

Who was calling the shots?

Coindesk’s reports suggest that Singh had control over funds, code and the matching engine at FTX, alongside Bankman-Fried and CTO Gary Wang. The Indian-origin key figure at FTX is now facing scrutiny over financial practices, since $10 billion was secretly transferred from the exchange to Alameda by Bankman-Fried. Singh has also been blamed for nepotism and conflict of interest at FTX, which led to the exchange’s collapse.

Crypto doomed by FTX’s fate?

The collapse has sent shockwaves through the already volatile crypto market, and wiped off billions in investors’ money for the second time this year, after the Terra collapse. It has also slashed 94 per cent from founder Bankman-Fried’s wealth, in one of the most spectacular falls from grace for an entrepreneur. The FTX fiasco has been compared to the Lehman Brothers collapse that exposed the 2008 financial crisis, and the Enron scam which pushed the energy firm to bankruptcy in 2001.

Published on: Thursday, March 02, 2023, 10:11 AM IST