Sam Bankman Dipping Into Customers’ Funds Was Done Unilaterally: Nishad Singh
SAN FRANCISCO, CA (IANS) – Indian-origin Nishad Singh, former director of engineering at collapsed crypto exchange FTX, on Monday said he had a lot of admiration and respect for FTX Co-founder and CEO Sam Bankman-Fried but over time, that “eroded”.
According to Singh, Bankman-Fried’s frequent dipping into customers’ funds was at times done “unilaterally” and was often “excessive.”
Singh, who has already pleaded guilty, testified as the third week of Sam Bankman-Fried’s criminal trial began in the US, according to CoinDesk.
Singh testified that he learned two months before the crypto exchange blew up that it was improperly using customers’ money.
He said he knew around $8 billion of FTX customers’ money had gone missing.
“I had a lot of admiration and respect for him, but over time that eroded,” Singh said of Bankman-Fried, his friend from high school, CoinDesk reported.
Singh said he “learned of a hole” in the company finances in September 2022.
The hole was “enormous,” Singh said, adding that the funds were used by Alameda Research which is Bankman-Fried’s affiliated trading firm “for a variety of venture investments, political donations, real estate purchases and other expenditures”.
“I had a lot of admiration and respect for him, but over time that eroded,” Singh told the court.
The Bankman-Fried trial resumed with more prosecution witnesses.
Like previous witnesses Alameda Research CEO Caroline Ellison and FTX Co-founder Gary Wang, Singh has also pleaded guilty to fraud and conspiracy counts.
Last week, Wang told the court that FTX used hidden Python code to misrepresent the value of its insurance fund.
FTX claimed in 2021 on Twitter that “the 5.25 million FTT (FTX tokens) we put in our insurance fund in 2019 now makes the fund worth over 100 million USD”.
However, former chief technology officer Wang said during his testimony that FTX’s so-called $100 million insurance fund in 2021 was fabricated, according to reports.
The FTX trial is expected to last six weeks. FTX — once the world’s second-largest cryptocurrency exchange — filed for bankruptcy in November last year.