- Nishad Singh cooperated with prosecutors against Sam Bankman-Fried in 2023.
- He learned the exchange company had stolen billions two months before its collapse in 2022.
- He was given a lighter sentence than co-defendant Caroline Ellison.
Nishad Singh, a soft-spoken former software engineer colleagues once called the “king of kindness,” was sentenced on Wednesday to time served for his role in the failure of FTX in November 2022.
In September of that year, Singh, 29, was a top executive at the crypto exchange led by Sam Bankman-Fried when he learned it had stolen billions from its customers to plug a gaping hole at its sister company, Alameda Research, a crypto trading firm.
Once valued at $32 billion, FTX’s collapse sent shock waves through an industry struggling to go mainstream and assuage the concerns of regulators worldwide.
Singh, once FTX’s head of engineering, was among the key witnesses who testified at the trial of Bankman-Fried in October 2023.
Cooperation factor
Singh pleaded guilty in 2023 to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the US by violating campaign finance laws.
In a letter this month to US District Court Judge Lewis Kaplan, Singh’s lawyers highlighted their client’s “extraordinary” circumstances, which included his relatively limited role in the collapse of FTX and his “immediate and exemplary” cooperation with prosecutors.
They asked that he be sentenced to time served, which means he wouldn’t spend more days behind bars.
Kaplan was convinced by that argument.
Reiterating his belief that the collapse of FTX was the greatest financial fraud in history, Kaplan told Singh he was “entirely persuaded ... that your involvement was much more limited than certainly Bankman-Fried and Ellison, that it came relatively late in the day.”
“Your case is not the case that Ms. Ellison’s was,” Kaplan continued, referring to Caroline Ellison, CEO of FTX sister company Alameda Research and the star witness at Bankman-Fried’s trial. Ellison was sentenced in September to two years in prison.
“She was involved from the beginning. She knew for years what was going on.”
When Singh took the stand at Bankman-Fried’s five-week trial, the software engineer said he had long found the CEO’s lavish spending “embarrassing” and reeking of “excess and flashiness.”
Companies within the FTX empire had spent hundreds of millions on venture investments, luxury real estate, celebrity endorsement deals, and political donations.
Singh also detailed at the trial the moment he learned the true cost of Bankman-Fried’s shopping spree.
Meeting with SBF
In September 2022, Ellison and FTX Chief Technology Officer Gary Wang told Singh that Alameda had borrowed billions from FTX customers.
He demanded a meeting with Bankman-Fried, according to his testimony.
Standing on the balcony of their $35 million penthouse in the Bahamas, the CEO confirmed to Singh that FTX couldn’t immediately repay all its customers if they decided to withdraw their cash and crypto en masse.
‘I felt really betrayed that five years of blood, sweat, and tears ... turned out to be so evil.’
— Nishad Singh
“I felt really betrayed that five years of blood, sweat, and tears from me and so many employees, driving towards something that I thought was a beautiful force for good, had turned out to be so evil,” Singh testified at Bankman-Fried’s trial.
During the following two months, Singh redoubled efforts to get Bankman-Fried to trim the company’s expenses, according to his lawyers. Still, he never blew the whistle on him.
Singh told the court he stayed at FTX because he was afraid his departure could precipitate the company’s demise.
“It was a panicked, self-delusional, and ultimately criminal error in judgement,” his attorneys wrote in their letter to Kaplan.
“Nishad knew that staying at FTX meant hiding the existence of the hole from customers, and that he would be taking otherwise routine steps that, in these circumstances, would perpetuate the fraud.”
Singh’s background
Raised in the San Francisco Bay Area, Singh was childhood friends with Bankman-Fried’s younger brother. He graduated from the University of California in Berkeley, majoring in electrical engineering and computer science.
In late 2017, Singh joined Alameda, impressed by its employees’ commitment to “effective altruism,” a philosophy that encourages adherents to seek high-paying careers and donate substantial sums to charity and good works.
Despite being an inexperienced programmer when he joined Alameda, he rose up the ranks. When FTX collapsed, Singh was the company’s head of engineering and its third largest shareholder.
During this time, he was suicidal, his parents wrote in letters to Kaplan.
Singh has since found full-time work as a software engineer outside the finance and crypto industries and become engaged to longtime girlfriend Claire Watanabe, according to letters from friends and family.
Singh is the fourth former FTX executive to be sentenced this year.
In March, Kaplan sentenced Bankman-Fried to 25 years in prison for stealing $8 billion from customers of the exchange. Ryan Salame, the former co-CEO of FTX’s subsidiary in the Bahamas, was sentenced to more than seven years in May.
Wang is scheduled to be sentenced on November 20.
Update, October 30: This story was updated to clarify Nishad Singh’s sentence.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.
