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Nishad Singh, a former top engineer at the defunct crypto exchange network FTX, testified on Oct. 16 that the network’s ex-CEO, Sam Bankman-Fried, had planned a potential deal with Telegram for TON tokens.
Singh commented when testifying in the ongoing court case against the former FTX CEO for financial malpractices and fraud.
FTX Pitched an Idea for a Deal with Telegram
Singh admitted that he was involved in defrauding customers and participating in money laundering. He mentioned Bankman-Fried, Gary Wang, Caroline Ellison, and Ryan Salame as co-conspirators.
In September 2022, while SBF was in the Middle East trying to raise money, SBF pitched the idea of a deal with Telegram to get $TON tokens. This would cost $120 million
A. There was a point when Sam was in the Middle East, he sent a message to a Signal group called hashtag…
— BitMEX Research (@BitMEXResearch) October 17, 2023
As described by Singh, part of the scheme unfolded last September when Sam Bankman-Fried was in the Middle East seeking to raise funds. The then-CEO proposed a deal with Telegram to net them a large quantity of TON tokens, Telegram’s cryptocurrency.
This deal would cost FTX $120 million. It was tabled in a Signal group called “hashtag meetings,” consisting of several KOL and leadership members.
Later, the CEO met with the larger FTX group, explaining his plan for the exchange to develop a payment-processing service for Telegram. As payment, FTX would get $100 million TON tokens.
While Singh and other team members expressed concerns about the risks of acquiring illiquid tokens, Sam Bankman-Fried decided to push forward with the plan. SBF told the team:
“We’re going ahead with this, Ramnik and I are. You guys shouldn’t feel responsible for it. That’s not why I shared it. Unless you have any serious new objections, we’re going ahead.”
Later in October 2022, during the Singapore 2049 event, the Ton Foundation announced a collaboration with Telegram to create the TON Space wallet. The idea in the deal was to consolidate Telegram’s foothold in the crypto sector and promote the adoption of digital assets. FTX was not mentioned at this point based on reports.
However, reports indicate that Telegram launched its self-custodial wallet on the TON blockchain a few weeks ago.
A Series of Questionable Money Decisions
Aside from the Telegram-related proposed deal, FTX, led by SBF, made some other questionable financial decisions. Singh talked about the $1 billion investment into Genesis Digital Assets, a Kazakhstan-based mining company. Later, FTX invested $500 million into Anthropic, an AI company focusing on AI safety.
FTX invested another $200 million into K5 and even went to dinner with big names like Jeff Bezos, Hillary Clinton, and Kamala Harris’s husband. Singh mentioned that SBF was impressed by the connection between those big names and other celebrities. As such, he thought being part of the big names would benefit FTX.
The acquisition of properties, including the Penthouse, together with other political donations, was mentioned by Singh in the proceedings.