Nishad Singh, a former executive at FTX, told Sam Bankman-Fried that he was uncomfortable with the “super ostentatious” $30 million Bahamas penthouse the company bought as a corporate crash pad. But those concerns didn’t stop Singh from moving into the nicest room.
Singh, FTX’s former chief of engineering, testified for a second day as a prosecution witness in Bankman-Fried’s fraud and conspiracy trial. On the witness stand, Singh frequently said he disapproved of Bankman-Fried’s actions but didn’t always take action. Instead, he admitted to taking advantage of the job’s perks, including the purchase of a $3.7 million home in the scenic San Juan Islands in northwestern Washington, using a company loan, while FTX was sliding into bankruptcy.
FTX founder Sam Bankman-Fried leaves Manhattan federal court on June 15, in New York. Bebeto Matthews/Associated Press
Singh is the third member of Bankman-Fried’s inner circle to testify after pleading guilty to felonies in connection with the implosion last year of FTX and its affiliated hedge fund, Alameda Research. Singh agreed to give up the house, on Orcas Island, as part of his deal with the government.
“My spending on it was egregious, unnecessary, and selfish,” the 28-year-old Singh said Tuesday. “I was embarrassed and ashamed, and forfeiting seems to be one of the ways to right the wrong, at least a little.”
Bankman-Fried faces decades in prison on charges that he funneled FTX customer money into Alameda for risky trades, political donations, and expensive property before both companies collapsed.
Bankman-Fried’s lawyer, Mark Cohen, questioned Singh after his team failed to significantly dent the testimony of prosecution witnesses Gary Wang, an FTX co-founder and a longtime friend of Bankman-Fried, and Caroline Ellison, Alameda’s chief executive officer, and Bankman-Fried’s former girlfriend.
That raised the stakes for Singh’s cross-examination as prosecutors near the end of their case. And Cohen was able to poke holes in Singh’s portrait of himself Monday as someone who tried to stand up to Bankman-Fried by showing that while he was complaining about corporate spending, he still took personal loans and stayed in the luxury penthouse.
Singh said Tuesday that the first time he felt like he had done something wrong was when he helped alter the records for staking fees for the FTX crypto token Serum in December 2021. Staking allows users to earn rewards – often more crypto – in exchange for having their tokens temporarily locked up and used in validating blockchain transactions.
On Monday, Singh told jurors that he agreed to backdate the staking fee payments to make it appear as if customers were getting charged throughout the year for the service instead of all at once at the end. That was done to boost FTX’s revenues to more than $1 billion. He said Bankman-Fried directed him to do that.
Like Wang and Ellison, Singh told jurors that he aided Bankman-Fried’s multi-billion-dollar fraud and agreed to cooperate with prosecutors in hopes of leniency when they’re sentenced.
It wasn’t until September 2022 that he learned of a massive multi-billion-dollar hole in FTX’s finances, Singh testified. But on cross-examination, Singh said he had told prosecutors that, even after gaining that knowledge, he thought the company would still “last for years.”
Singh testified that he considered quitting several times while working for Bankman-Fried, including after upsetting conversations with Bankman-Fried or his FTX co-founder, Wang.
Prosecutors anticipate resting their case this week or next, after which Bankman-Fried will have to say whether he will take the stand in his defense. Judge Lewis Kaplan told the jury on Wednesday the evidence phase of the trial, which doesn’t include jury deliberations, could conclude as early as Oct. 31.
Cohen questioned Singh about his claim that he disapproved of what he called Bankman-Fried’s “excessive” spending on marketing, including sponsorship of an NBA arena and endorsements by celebrities including quarterback Tom Brady and comedian Larry David.
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