Mar 9, 2023

FTX’s Singh Bought His Dream House in October. It’s the Government’s Now

Ava Benny-Morrison, Bloomberg News

Nishad Singh, center, leaves federal court in New York. , Photographer: Bob Van Voris/Bloomberg

(Bloomberg) -- Late last year FTX engineering chief Nishad Singh snapped up a Pacific Northwest vacation home with a commanding view of the San Juan Islands as a retreat from his job at the red hot crypto exchange.

Now it will go to the US government, after Singh agreed to forfeit the six-bedroom, $3.7 million property as part of his guilty plea in the federal fraud case over the exchange’s implosion, according to people familiar with the case. They spoke on the condition of anonymity because the forfeiture was redacted from court records.

The home, perched on a wooded hill, features a lap pool, a hot tub and fruit trees dotting the property. Singh, 27, paid for the house with money from his personal FTX account. But the government believes the property is linked to his crimes in the case, in which prosecutors allege that customer funds at FTX were misappropriated by co-founder Sam Bankman-Fried and his lieutenants.

Read More: Top Bankman-Fried Associate Nears Plea Deal in US Probe of FTX

Singh signed a deed for the house on Oct. 25, according to county property records.

Singh, who pleaded guilty to a six-count indictment including wire fraud, has also agreed to forfeit an undisclosed amount of stock, prosecutors said in court last month. The assets subject to forfeiture were blacked out in a revised indictment filed in conjunction with his guilty plea. His lawyer declined to comment on the property forfeiture but, following the plea, said Singh “wants to do everything he can to make things right for victims.”

The plea marked the culmination of more than two months of talks with federal investigators in Manhattan about Singh’s exposure to an alleged fraud at FTX that has cost customers more than $8 billion. It marked another coup in their case against Bankman-Fried, who is fighting charges of fraud and campaign finance violations. Bankman-Fried’s spokesman Mark Botnick declined to comment.

Read More: FTX Founders Traced an Arc of Brotherhood and Betrayal

Singh has agreed to cooperate with the government in the hope of receiving a lighter sentence. Two of his associates, former Alameda Research Chief Executive Officer Caroline Ellison and FTX co-founder Gary Wang, have also pleaded guilty and are cooperating with authorities.

Bankman-Fried’s own assets, valued at almost $700 million, will be subject to forfeiture if the FTX co-founder is found guilty of fraud, according to prosecutors. In a court filing in January, they outlined 10 accounts with a mix of shares, cash and cryptocurrency that can be taken.

Read More: Bankman-Fried Assets of Almost $700 Million May Be Forfeited

Singh was a childhood friend of Bankman-Fried’s brother, Gabe, and joined an Alameda subsidiary as an engineer in late 2017. He then began working with Wang on the foundational code to build FTX, which became one of the world’s largest cryptocurrency exchanges.

At FTX he managed about 20 engineers and took direction from Bankman-Fried on “high priority projects,” according to a lawsuit filed by the US Securities and Exchange Commission. Singh became aware that Alameda was borrowing funds from FTX in mid-2022, he told a judge during his plea hearing.

In June, he tried to track the amount of customer funds that Alameda had borrowed from the exchange, and by early September he realized the hedge fund couldn’t repay the billions it owed. Nonetheless, Singh said, he signed off on Alameda expenditures and, at Bankman-Fried’s direction, provided misleading information to auditors. Bankman-Fried, 31, has admitted managing FTX poorly but denied participating in any illegal activity.

In 2020 and 2021, Singh signed off on $557.5 million in “founder loans” from Alameda, the SEC says. While the promissory notes were in his name, Bankman-Fried spent some of the funds on investments and building his FTX empire, according to the regulator.

In 2021, Singh borrowed $10 million and provided the funds to friends and family, the SEC alleges. Bankman-Fried authorized him to fund some political and charitable donations through a line of credit on his personal FTX account, according to the SEC.

He also used Singh as his left-facing political donor. Singh donated $9.3 million to Democratic campaigns and committees between 2020 and 2022.

The case is US v. Bankman-Fried, 22-cr-673, US District Court, Southern District of New York (Manhattan).