FTX fiasco: Indian-origin engineer Nishad Singh pleads guilty before SEC over fraud charges

Nishad Singh, a 27-year-old Indian-origin engineer who was the former co-lead engineer of FTX Trading Ltd, has admitted to charges of commodities fraud. Singh is facing federal charges for his role in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform he started with Samuel Bankman-Fried and Gary Wang.

The Securities and Exchange Commission, the US Attorney's Office for the Southern District of New York, and the Commodity Futures Trading Commission have all announced charges against Singh. Singh has pleaded guilty to charges of commodities fraud and other charges in the separate, parallel action against him in the Southern District of New York.

According to the SEC's complaint, Singh 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, despite false assurances to investors that FTX was a safe crypto asset trading platform. The complaint alleges that Singh was an active participant in the scheme to deceive FTX's investors and that he knew or should have known that such statements were false and misleading.

The complaint also alleges that 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, as FTX neared collapse.

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Singh was the Head of Engineering at Alameda and later at FTX. He was a shareholder and senior executive of FTX and was FTX's Director of Engineering at the time of its collapse in November 2022.

The CFTC complaint charges that Singh personally misappropriated millions of dollars of assets, including FTX customer assets, through poorly documented "loans" from Alameda and other improper withdrawals of funds from FTX for various personal expenditures. Singh does not contest his liability on the CFTC's claims and has agreed to the entry of a proposed consent order of judgment.

SEC Chairman Gary Gensler has said that the alleged fraud committed by Bankman-Fried is a “clarion call to crypto platforms that they need to come into compliance with our laws”.

(With Agency inputs)

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