Former FTX Engineering Director Admits to Fraud Charges

Former FTX Director of Engineering admits to wire and commodities fraud
Singh allegedly modified FTX’s software to benefit Alameda
Singh’s guilty plea follows reports of cooperation by Bankman-Fried’s allies

Reuters reported that former FTX engineering director Nishad Singh would likely admit fraud charges in the investigation of the collapsed FTX exchange.

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According to Singh’s lawyer, he has consented to plead guilty to charges of wire fraud, conspiracy to commit wire fraud on clients of FTX, and conspiracy to commit commodities fraud in Manhattan’s federal court.

Singh joined FTX’s director of engineering in 2019. In 2020, Singh allegedly modified FTX’s software to allow Alameda, a company where he had once served as chief executive, to escape automatic asset sales when it was losing too much money due to excessive borrowing.

This loophole, according to Reuters, enabled Alameda to continue borrowing from FTX regardless of the amount of collateral backing its loans. The U.S. SEC has alleged that this code upgrade allowed Alameda a virtually unlimited credit line at FTX and that the billions of dollars FTX lent Alameda over the next two years originated from FTX customers.

In early January, Singh appeared in front of the Southern District of New York United States Attorney’s Office for a proffer session. During a proffer session, the individual sharing information with prosecutors may enjoy minimal protection.

Singh’s guilty plea follows reports that a number of Bankman-closest Fried’s allies have agreed to collaborate with authorities in recent months.

In other news, Lee Woong-yeol, honorary chairman of the Korean company Kolon, is collaborating with Binance to establish a new trading platform for virtual assets in South Korea. Binance just acquired the South Korean Gopax exchange. However, the acquisition is being scrutinized by the government.

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José Gustavo

José is a crypto enthusiast who trades crypto night and day. He loves to share his trading stories and experiences in all his published articles. José likes to hang out and travel to meet new friends. Enjoys sushi, vodka, and tequila.