Nishad Singh, the former head of engineering at FTX, will pay $3.7 million to resolve his case with the US commodities regulator over his alleged role in the collapse of a cryptocurrency exchange and misappropriation of user funds.
As part of the supplemental consent order, Singh will be required to pay a variance of $3.7 million and imposes a five-year trading ban on the markets and an eight-year registration ban, barring him from obtaining a license to operate in the industry, the U.S. Commodity Futures Trading Commission (CFTC) said. he said in a statement on Wednesday.
“The initial consent order and the additional consent order resolve the enforcement actions taken by the CFTC against Singh,” it added.
FTX’s November 2022 bankruptcy sent shockwaves through the cryptocurrency industry, wiping out billions of market liquidity, undermining user confidence and prompting authorities to accuse its leadership of fraud.
David Miller, the CFTC’s director of enforcement, ruled out additional fines in the form of restitution or civil monetary penalties for now and said the current penalties reflect Singh’s cooperation with authorities.
“As FTX’s former chief engineering officer, the defendant committed and assisted in significant violations of the Act and the CFTC regulations, and the consent decrees issued reflect the seriousness of these violations,” Miller said.
“But this resolution also reflects the Commission’s commitment to rewarding and encouraging material assistance in the Department’s investigations,” he added.
Singh indicted by multiple agencies after FTX collapse
Singh’s attorneys said he was grateful for the conclusion of this latest case and “was pleased that the CFTC recognized our client’s limited role in the underlying proceedings and his extensive cooperation,” Bloomberg reports.
The CFTC accused Singh of personally misappropriating millions of dollars in assets accused him in February 2023 on two counts: fraud by misappropriation and aiding and abetting the fraud committed by former FTX CEO Sam Bankman-Fried.
Related: The FTX Recovery Trust will distribute $2.2 billion to creditors in March
In April 2023, Singh entered a consent order, was found responsible for the charges and agreed to cooperate with the commission’s investigators. The regulator originally sought a range of penalties, including restitution, civil monetary penalties and a enduring trading and registration ban.
In a separate case filed by the Securities and Exchange Commission in February 2023, Singh was charged with misusing customer funds and committing embezzlement fraud in violation of securities laws. There was a case settled in December, and Singh received an eight-year industry ban.
Following the collapse of FTX, U.S. prosecutors also indicted Singh and four of his associates on charges of fraud and campaign finance violations. If found guilty, he faced decades in prison, but after testifying against Bankman-Fried and cooperating with prosecutors, he received a prison sentence and three years of supervised release.
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