Federal prosecutors are moving to scrutinize other key FTX and Alameda staff—following founder Sam Bankman-Fried’s fraud charges.
- Former FTX chief engineer Nishad Singh is the newest colleague of Sam Bankman-Fried (SBF) to face scrutiny from the Securities and Exchange Commission and the Commodity Futures Trading Commission, Bloomberg reports.
- SBF was charged with eight counts of fraud on December 13, pleading not guilty and accepting a $250 million bail package on January 3—following allegations that he facilitated one of the largest collapses of a financial institution in history.
- Singh is a high school friend of SBF and a key figure at the company, although it is unclear if he had anything to do with FTX’s financial scandals. Other colleagues of SBF, like Caroline Ellison and Gary Wang, have already pleaded guilty to fraud.
Why It’s Important
Singh hasn’t been accused of any criminal behavior, but the unfurling of FTX’s web of connections and allegations continues. Former Enron liquidation lawyer John J. Ray III continues investigating the bankrupt company in search of lost funds. It is expected that the full extent of the company’s abuses will not be known for years.
As Federal prosecutors continue to investigate, it is likely new charges will be coming down for former FTX employees yet to be implicated in the company’s collapse. Singh’s role in it remains to be seen, if he had one. It is known that he borrowed $543 million from Alameda, but it is unclear if this was illegal or not, Bloomberg notes.
“If federal prosecutors in Manhattan find Singh had a role in the alleged multiyear scheme at FTX and trading firm Alameda Research to defraud investors and clients, he could be charged as soon as this month,” says Bloomberg.
U.S. Attorney for the Southern District of New York Damien Williams says federal prosecutors will continue digging into SBF’s inner circle and asked for cooperation. Ellison and Wang both received a deal for cooperating.
“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it. We are moving quickly and our patience is not eternal,” says Williams.