The former head of engineering at the collapsed cryptocurrency exchange FTX is nearing a plea deal with federal prosecutors, according to people familiar with the matter, potentially bolstering the criminal case against founder Sam Bankman-Fried.
Nishad Singh, who worked at affiliate trading platform FTX Alameda and then at FTX itself, will become the third high-level employee to cooperate with the government, after former Alameda chief Caroline Ellison and FTX founder Gary Wang pleaded guilty to several charges in December.
News of Singh’s impending plea agreement was first reported by Bloomberg.
Ellison and Wang are expected to testify in the looming trial of Bankman-Fried, who faces eight criminal charges and could spend the rest of her life in prison if convicted. Bankman-Fried has pleaded not guilty.
FTX, once valued at $32bn, collapsed into bankruptcy in November after being unable to meet a wave of withdrawal requests from customers. Prosecutors said the collapse, which affected more than 1 million potential creditors, was “one of the largest financial frauds in American history”.
In a closed hearing in December, hours before Bankman-Fried was extradited from the Bahamas to New York, Ellison told a US federal judge that from 2019 to 2022 Alameda had access to an “unlimited line of credit at FTX.com” and that he “knew that incorrect”.
Nishad Singh, left, and Caroline Ellison, right, both part of the Bankman-Fried circle © Financial Times
He has since told prosecutors Bankman-Fried prefers to communicate using an ephemeral and hidden platform, to limit the amount of evidence in potential future trials. The government has used this testimony to argue for stricter bail conditions, which would have prevented Bankman-Fried from using the internet and certain devices.
Singh, a schoolmate of Bankman-Fried’s sister, once worked as a software engineer for Facebook, before joining Alameda in 2017.
Last month, FTX sought to subpoena Singh, along with several members of the Bankman-Fried circle, as part of the exchange’s bankruptcy proceedings filed in Delaware. The court granted the request.
Attorneys for Singh and the U.S. attorney’s office for the Southern District of New York declined to comment. A representative for Bankman-Fried declined to comment.
Bankman-Fried, who has been released on bail and is living at her parents’ home in Palo Alto pending trial, appeared in court in New York on Thursday after prosecutors accused her of witness tampering for trying to contact Ryne Miller, FTX US. general counsel.
The former billionaire’s lawyer – who argued his client tried to influence witnesses – objected to looser bail conditions that allowed Bankman-Fried to communicate using various platforms, including direct messages on Twitter, where she has more than 1 million followers.
But Judge Lewis Kaplan, who presided over the case, raised the prospect of revoking Bankman-Fried’s bail if he was not satisfied the defendant could not use technology to hide communications.
A trial for Bankman-Fried is scheduled for October.