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.
Federal officials accused Bankman-Fried of coordinating a plot to swindle equity investors in FTX in December of last year.
Singh was charged by the Securities and Exchange Commission on Tuesday. In a related move, Singh was also charged by the Commodities Futures Trading Commission (CFTC) and the US Attorney's Office for the Southern District of New York.
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.
Singh charged with actively participating in defrauding FTX's investors
Singh is charged with actively participating in the plot to defraud FTX's investors, according to the complaint. Singh withdrew about $6 million from FTX as the company was on the verge of bankruptcy for personal use, including the purchase of a multimillion-dollar home and payments to charitable organisations.
Singh, a citizen of the United States, oversaw engineering at Alameda before moving on to FTX. Singh lived in The Bahamas and Hong Kong between May 2019 and November 2022.
