fxstreet.com
- Nishad Singh, FTX co-founder took the stand on Monday, October 16 as SBF trial continues.
- Among other things, Singh revealed multiple instances of concern over SBF being a spendthrift.
- He felt betrayed and wanted to exit, but did not want his departure to precipitate the end of FTX.
Nishad Singh, co-founder, and software engineer of cryptocurrency exchange FTX, took the stand on Monday, October 16, passing as the next executive in the mix to testify against Sam Bankman-Fried (SBF). It comes after the defendant requested for midday Adderall. While his testimony captured a wide range of topics, it all doubled down to the scary extravagance displayed by SBF when the trading platform was still operational.
Nishad Singh describes SBF as a spendthrift
Nishad Singh came in as a Witness after Tareq Morad, a former customer whose funds remain tied to the platform. Nishad pleaded guilty to committing crimes of fraud and campaign finance violations, conspiring with Sam Bankman-Fried, Caroline Ellison, Gary Wang and others.
Singh had met SBF through the defendant’s younger brother, Dave before he started working at Alameda Research around 2017. Distinguishing roles between SBF and Gary Wang, Singh said that the defendant performed endorsement deals, while singlehandedly spearheading investment ventures.
Interestingly, the witness said that SBF intimidated him, adding that “Sam is a formidable character - I came to distrust him.” Acknowledging that he [Singh] was a billionaire, he confirmed receiving loans from the company, using the funds for large purchases and donations. He also indicated that SBF took over the leadership of Alameda from Sam Trabucco and Caroline Ellison.
One of his [SBF] computer screens was Alameda. SBF would unilaterally spend Alameda's money. He told me he'd threatened to fire Caroline.
On SBF’s spending approach, Singh noted that it was “excessive,” revealing that he had complained “about the excess and flashiness.” Despite Singh citing that the company was fleeced for $20 million, SBF called him out for “sowing doubt.”
SBF spending on donations and endorsements
SBF had spent up to $1 million on Genesis Digital Assets crypto mining. He also set up the Anthropic deal, investing up to $500 million through Alameda.
Singh also highlighted that SBF had told him about links with important celebrities, including the then presidential candidate Hillary Clinton, Orlando Bloom, Kate Hudson, Kamala Harris' husband, and Leonardo DiCaprio, among others.
Among the attendees, Michael Kives, SBF had given Singh and Wang a term sheet to give millions in bonus to Kives and Bryan Baum, and a billion investment in their VC firm. At this point, Singh had insisted that it be done with Sam's money and not FTX's money. They had also given $28 million to basketball star Steph Curry, $14 million to Kevin O'Leary, and a total of $1.3 billion to Tom Brady, Gisele Bundchen, and Larry David.
SBF spending on real estate
According to Singh, SBF has an Orchid penthouse worth $30 million at the Old Ford Bay, where the defendant’s father, Joe Bankman, lived in. On this matter, the defendant had expressed to SBF that “it was too ostentatious,” but said he'd spend $100 million to make the drama go away.
When LUNA and UST had some sort of algorithmic failure in May 2022, SBF had proposed to acquire large sources of capital like Celsius or BlockFi, and talked with Ramnik Arora, who worked with SBF on venture capital.
Alameda’s negative balance on FTX
Singh attributed this to the “allow negative,” flag, explaining that it paved the way for a bug to prevent the correct accounting for the Fiat [at] FTX account. The error had grown to $ 8 billion. Specifically, the “allow negative feature” was for getting FTX back the ability to get back locked forms of FTT.
At some point, Singh wanted to exit the firm but did not want his departure to precipitate the fall of the platform. This was after calling the defendant out for his spendthrift behavior.
Singh: I was upset at the endorsement deals, it was a billion dollars. I said this is crazy, cut this. He said he didn't think these were bad spends. I pointed at a couple. He said he agreed, but that cutting would cost 70% of seeing them through.
— Inner City Press (@innercitypress) October 16, 2023
Sam had even proposed paying up to $120 million for messaging platform Telegram, sourcing the funds from customer holdings. There were political donations made in Singh’s name, with the money coming from Alameda. Reportedly, Singh’s involvement was very little as he “tried to be as uninvolved as possible.”
Singh: Sam let his brother Gabriel to so it. Ryan Saleme access to my account. My role was to click the buttom.
— Inner City Press (@innercitypress) October 16, 2023
AUSA: Who was Ryan Salame?
Singh: He ran fiat trading. He would log into my Prime Trust account and give money to candidates or Super PACs. He'd ping me
Notably, Singh is not charged with campaign finance violations, but his deal 3501-2, has a maximum sentence of 75 years. He pled to defrauding and money laundering and campaign finance violations.