Luc Cohen
NEW YORK (Reuters) – Former cryptocurrency executive Nishad Singh will be sentenced on Wednesday for his role in his jailed former boss Sam Bankman-Fried’s theft of about $8 billion in client funds from the now-collapsed FTX exchange.
Singh, who pleaded guilty to six counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. In a plea agreement with prosecutors, Singh admitted to his role in what they called one of the largest financial frauds in U.S. history and to acting as a “straw donor” in the form of a share of Bankman-Frieda’s multimillion-dollar political donations.
Bankman-Fried, 32, is serving 25 years in prison at the Metropolitan Detention Center in Brooklyn for the November 2022 collapse of the FTX exchange he founded.
Singh, 29, is a former chief engineer at FTX. He is expected to receive a much lighter sentence from U.S. District Judge Lewis Kaplan at a hearing scheduled for 3 p.m. ET (7 p.m. GMT) in federal court in Manhattan. Prosecutors called for leniency, while Singh’s lawyers recommended that he not serve any prison time.
“Singh provided significant assistance to the government in the investigation and prosecution of perpetrators of crimes and in the recovery of property from victims,” the U.S. attorney’s office in Manhattan said in a lawsuit filed on Oct. 23.
Last month, Kaplan sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and director of sister hedge fund Alameda Research, to two years in prison. The judge praised her cooperation but said such assistance could not be a “get out of jail free card” in a case as solemn as this.
Singh’s lawyers wrote in an Oct. 16 court filing that he joined the conspiracy relatively behind schedule, after Bankman-Fried and Ellison had already decided to exploit billions of dollars in FTX client funds to patch up losses at Alameda.
Bankman-Fried has weathered a surge in cryptocurrency prices during the Covid-19 pandemic, reaching a net worth of $26 billion by October 2021, according to Forbes. He gained notoriety as a prolific donor to philanthropy and Democratic politicians.
His fortune evaporated when FTX collapsed amid an avalanche of customer withdrawals.
Singh testified during the trial that during an hour-long conversation in September 2022, he confronted Bankman-Fried about the clients’ massive shortfall in funds on the balcony of their $35 million Bahamas apartment rental. Singh said Bankman-Fried assured him he would raise more funds and lower costs.
Bankman-Fried is appealing the ruling, arguing that Kaplan erroneously excluded evidence showing that he believed FTX had sufficient funds to cover customer withdrawals.
Gary Wang, the third former FTX executive who cooperated with prosecutors, is scheduled to be sentenced on November 20.
