NEW YORK, Feb. 28 (Reuters) – Nishad Singh, the former technical director of now-bankrupt cryptocurrency exchange FTX, pleaded guilty to US criminal charges on Tuesday and agreed to cooperate with prosecutors’ investigation into FTX founder Sam Bankman Fried.
“I’m incredibly sorry for my role in all of this,” Singh said, adding that in mid-2022 he knew that Bankman-Fried’s hedge fund, Alameda Research, was borrowing money from FTX clients and that clients didn’t know. Singh said he would forfeit the proceeds from the scheme.
Bankman-Fried, the founder of FTX, pleaded not guilty to eight criminal charges filed against him in December. Prosecutors say he stole billions in FTX funds from customers to cover losses at Alameda. He admits insufficient risk management, but says he did not steal any money.
Singh, 27, pleaded guilty to one count of telephony fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering and one count of conspiracy to defraud the United States by violating campaign finance laws.
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He traveled back from the Bahamas shortly after FTX imploded in November, in part to assist the US investigation, prosecutor Danielle Sassoon said at Tuesday’s hearing. He was released on $250,000 bail.
Bankman-Fried, 30, now faces 12 criminal charges after prosecutors unsealed a new charge against him last week. A Bankman-Fried spokesperson declined to comment.
Singh is the third close associate of Bankman-Fried to plead guilty and cooperate with the investigation. Caroline Ellison, Alameda’s CEO, and Gary Wang, FTX’s chief technology officer, pleaded guilty to seven and four charges, respectively, in December.
“He wants to do everything he can to make amends for the victims, including by assisting the government as best he can,” Singh’s lawyers Andrew Goldstein and Russell Capone said in a statement.
Separately on Tuesday, the US Securities and Exchange Commission and the Commodity Futures Trading Commission filed civil lawsuits against Singh.
DONORS ‘STRAW’
Bankman-Fried rocketed the value of bitcoin and other digital assets to amass an estimated net worth of $26 billion and become an influential US political donor.
Singh also became a major donor to Democratic politicians, contributing $8 million to campaigns in the 2022 election cycle, according to OpenSecrets.
In the new indictments filed last week, prosecutors said Bankman-Fried conspired with two other former FTX executives to donate tens of millions of dollars to influence lawmakers to pass legislation for the company.
The donations were illegal because they were made with “straw” donors or corporate funds, prosecutors said. They said Bankman-Fried directed another FTX executive identified as CC-1 to donate more than $21 million to a pro-LGBT group.
Federal Election Commission records show that on July 7, 2022, Singh contributed $1.1 million to the LGBTQ Victory Fund, a national organization dedicated to openly electing LGBTQ people.
Singh said in court that in 2022 he agreed to make political donations in his own name funded in part by transfers from Alameda, without providing details of the donations. He said that while he agreed with the political leanings of those he donated to, he did not select the candidates.
Singh was a close friend of Bankman-Fried’s younger brother in high school, Bankman-Fried wrote in a deleted blog post.
“Today’s guilty plea once again underscores that the crimes at FTX were enormous in scope and impact,” Damian Williams, the chief federal prosecutor in Manhattan, said in a statement.
“They’ve rocked our financial markets with multibillion-dollar fraud. And they’ve corrupted our politics with tens of millions of dollars in illegal straw campaign contributions.”
Reportage by Luc Cohen and Jody Godoy in New York; Edited by Matthew Lewis and Bill Berkrot
Our Standards: The Thomson Reuters Principles of Trust.
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