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FTX Co-Founder Nishad Singh Pleads Guilty in Fraud Inquiry

Nishad Singh, an FTX founder, pleaded guilty to criminal charges and agreed to cooperate with prosecutors investigating Sam Bankman-Fried.

A former high-ranking colleague of Sam Bankman-Fried on Tuesday became the third person to plead guilty to criminal charges arising from the collapse of the cryptocurrency exchange FTX and will cooperate with federal prosecutors.

Nishad Singh, 27, an FTX founder who went on to serve as its director of engineering, pleaded guilty to charges of wire fraud, commodities fraud, securities fraud, money laundering and campaign finance violations. The plea requires him to work with federal prosecutors as they pursue the billion-dollar fraud case against Mr. Bankman-Fried.

“Today’s guilty plea underscores once again that the crimes at FTX were vast in scope and consequence,” Damian Williams, the U.S. attorney for the Southern District of New York, said in a statement. “They rocked our financial markets with a multibillion-dollar fraud. And they corrupted our politics with tens of millions of dollars in illegal straw campaign contributions.”

Andrew D. Goldstein, Mr. Singh’s lawyer, did not immediately respond to a request for comment. The charges against Mr. Singh carry a maximum prison term of 75 years, though plea deals often result in significantly reduced sentences.

Mr. Singh was a key figure at FTX who worked closely with Mr. Bankman-Fried, Mr. Wang and Ms. Ellison. In the plea agreement, authorities said Mr. Singh had knowledge of or participated in an effort “to artificially inflate FTX’s revenue,” and provided false or misleading information to auditors and regulators.

The investigation has gained steam in recent weeks. On Feb. 23, federal prosecutors announced a revised indictment against Mr. Bankman-Fried that included several new charges and detailed the alleged scheme to defraud customers and investors and funnel tens of millions in illegal campaign contributions to political candidates and political action committees.

Mr. Bankman-Fried pleaded not guilty in January to the original indictment and is expected to return to New York in the next few months to be arraigned on the revised charges, according to a court filing. A spokesman for Mr. Bankman-Fried declined to comment.

As FTX grew, Mr. Bankman-Fried became its public face while Mr. Wang and Mr. Singh were crucial behind the scenes, responsible for writing the software code for FTX.

In all, FTX employees and others associated with the crypto exchange contributed $93 million to political campaigns over the past several years. Mr. Singh and Mr. Bankman-Fried mainly backed Democratic candidates while Mr. Salame largely backed Republicans. FTX’s bankruptcy lawyers recently sent a letter to political campaigns and political action committees asking for the money to be returned by the end of the month.

Starting in the weeks before the 2020 election, Mr. Singh gave nearly $9.7 million, mostly to super PACs associated with the Democratic Party. Last summer, he gave $1.1 million to the LGBTQ Victory Fund Federal PAC, accounting for the majority of the money raised by the organization, campaign records show.

The revised indictment against Mr. Bankman-Fried included an allegation that a political consultant working for the crypto entrepreneur pressured an unnamed co-conspirator to make a contribution of at least $1 million to a PAC that “appeared to be affiliated with pro-LGBTQ issues.”

The charging document against Mr. Singh did not go into great detail about the nature of his campaign finance violations.

Category: Technology

Source: NYTimes Technology

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