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SBF Inner Circle Shrinks as Former FTX Engineer Pleads Guilty to Fraud Charges

2 mins
Updated by Ryan Boltman
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In Brief

  • FTX's former engineering director Nishad Singh is the latest of SBF's lieutenants to plead guilty to fraud charges.
  • Singh joins former mentor Gary Wang in pleading guilty to fraud charges related to a case against their former boss, Samuel Bankman-Fried.
  • If convicted, Singh could face up to 75 years in jail.
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FTX’s former engineering director Nishad Singh pleads guilty to fraud-related charges, becoming the latest of Sam Bankman-Fried’s lieutenants to turn themselves in.

Singh pleaded guilty to six charges in a Manhattan court on Feb. 28, 2023, including conspiracies to commit money laundering and wire fraud, and wire fraud.

Singh Allegedly Instructed Coders to Ignore Alameda Liquidations

Singh allegedly advised FTX programmers not to liquidate loan positions of FTX affiliate Alameda Research in a comment embedded in FTX’s code.  

FTX is a bankrupt Bahamian crypto exchange co-founded by disgraced former CEO Sam Bankman-Fried (SBF) who faces criminal charges for, among other things, fraudulently extending a multi-billion dollar credit line to Alameda.

“Be extra careful not to liquidate,” wrote Singh in the code’s comments, according to documents seen by Reuters

Programmers seed code with comments to inform readers what action a certain section of code performs. Comments also prevent code maintainers from breaking intended functionality through modifications. Singh’s comment would have informed anyone maintaining FTX’s code to allow Alameda to continue borrowing from FTX, even if the market maker’s loans became undercollateralized. 

In their latest indictment against SBF, prosecutors mentioned the alleged code manipulation that Singh may have taken part in. 

They assert that SBF “caused the creation of secret loopholes…that allowed Alameda to incur a multi-billion-dollar negative balance on FTX.”

The former CEO has denied all criminal charges. He is currently out of jail according to the conditions of a strict bond agreement.

Singh Could Face 75 Years in Jail

If convicted, Singh can face up to 30 years in prison for wire fraud. The severity of the sentence will depend on circumstances such as the amount lost and the number of victims. He could face an additional 40 years for the money laundering and wire fraud conspiracy charges.

Gary Wang, who served as FTX’s CTO, faces a possible 50 year sentence after pleading guilty to four counts of conspiracy as well as fraud charges. 

Caroline Ellison, who was Alameda’s co-CEO from 2021 but was fired when FTX filed for bankruptcy last year, faces up to 11 decades in jail after pleading guilty to several conspiracy counts.

Wang and Ellison have entered plea deals to help prosecutors in their case against Bankman-Fried. If the courts consider their input helpful, the pair may serve reduced sentences.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...