Disclaimer: The article has been updated to show that Nishad Singh pleaded guilty to FTX fraud charges, which previously reported on his intent to plead guilty in court.
Nishad Singh, former director of engineering at FTX, pleaded guilty to fraud charges brought by U.S. prosecutors and agreed to cooperate in their investigations around former FTX CEO Sam Bankman-Fried (SBF).
During the hearing in a Manhattan federal court, Singh's lawyer announced that his client had agreed to plead guilty to one count of wire fraud, one count of conspiracy to commit wire fraud on FTX customers, and one count of conspiracy to commit commodities fraud, according to a Reuters report.
"I am unbelievably sorry for my role in all of this," Singh said while confessing Alameda Research's role in misappropriating FTX users' funds. On the other hand, SBF pleaded not guilty to eight criminal counts, which could result in 115 years in prison should he be convicted.
Nishad Singh, the former director of engineering at now-bankrupt crypto exchange FTX, has agreed to plead guilty to U.S. criminal charges, his lawyer said in court, as U.S. prosecutors ramp up their probe into members of Sam Bankman-Fried's inner circle https://t.co/KinlD4h4Zj pic.twitter.com/8UFekP2XF5— Reuters Legal (@ReutersLegal) February 28, 2023
According to CNBC, Singh was a close friend of FTX founder Sam Bankman-Fried’s younger brother in high school and became FTX’s director of engineering in 2019. In 2020, Singh allegedly altered FTX’s software to allow Alameda, where he had previously worked as chief executive, to avoid automatic asset sales when it was losing too much borrowed money. This exemption allowed Alameda to continue borrowing from FTX regardless of how much collateral secured its loans, according to Reuters. The U.S. Securities and Exchange Commission has alleged that this code change gave Alameda a “virtually unlimited line of credit” at FTX and that the billions of dollars that FTX lent Alameda over the next two years came from FTX customers.
Singh, who was absent from public view for an extended period compared to other FTX executives, emerged in early January to participate in a proffer session at the Southern District of New York’s United States Attorney’s office. During a proffer session, the person providing information may be given partial protection to divulge their insights to the prosecutors.
Related: Unsealed superseding indictment against Sam Bankman-Fried includes 12 criminal charges
Singh’s plea comes after a number of Bankman-Fried's close associates have reportedly agreed to cooperate with prosecutors in recent months.
In December, Cointelegraph reported that former FTX and Alameda Research executives Caroline Ellison and Gary Wang had pleaded guilty to fraud charges, and were cooperating with the Justice Department’s investigation.
Bankman-Fried has pleaded innocent to eight federal charges and is currently living with his parents in California. His criminal trial in federal court is scheduled to begin in October, while FTX’s bankruptcy case is ongoing in U.S. Bankruptcy Court for the District of Delaware.