By Mark Hunter
23 hours agoThu Oct 31 2024 09:18:47
Reading Time: 2 minutes
- Nishad Singh, a former FTX executive, has avoided prison over his activities with the collapsed exchange
- Singh’s cooperation in the Sam Bankman-Fried case, including aiding asset recovery, was commended by prosecutors
- Current FTX CEO John Ray emphasized Singh’s role in the firm’s bankruptcy proceedings
Former FTX executive Nishad Singh has avoided prison following his role in aiding the federal investigation into the collapsed cryptocurrency exchange and cooperating in the case against Sam Bankman-Fried, now serving a 25-year sentence. Singh, who served as FTX’s chief engineer, provided essential information during bankruptcy proceedings, which prosecutors noted was pivotal for asset recovery. In a federal court ruling, Singh was sentenced to time served with three years of supervised release.
Singh Sung to Avoid Sentence
Singh was reportedly a close friend of FTX founder Sam Bankman-Fried’s younger brother in high school, and became FTX’s director of engineering in 2019. However, in 2020, he allegedly modified FTX’s software to help Alameda, his former employer, avoid automatic liquidation – i.e. asset sales when it was losing too much borrowed money.
This modification allowed Alameda to continue borrowing from FTX regardless of how much collateral secured its loans, resulting in a “virtually unlimited line of credit,” according to prosecutors.
Following the downfall of FTX in late 2022, Singh worked closely with law enforcement to offer insights into the actions of Bankman-Fried and other executives, including Caroline Ellison, who had received a prison sentence in September for her role as former CEO of FTX’s sister firm, Alameda Research.
Singh’s contributions were viewed as critical by prosecutors in establishing a thorough case against Bankman-Fried, who led the company into one of the largest financial scandals in crypto history.
Judge Praises “Remarkable” Cooperation
Judge Lewis Kaplan praised Singh’s cooperation in the investigation, underscoring his swift action in providing evidence of the company’s internal misconduct, noting, “Your cooperation has been remarkable.”. Current FTX CEO John Ray also emphasized Singh’s unique value, noting his “extensive knowledge of FTX’s system and processes,” which has been instrumental to bankruptcy efforts.
Singh’s cooperation was crucial in his receiving a sentence of time served following his guilty plea in March 2023, which continues to form a crucial part of FTX’s ongoing restructuring and recovery efforts.
