NEW YORK (Reuters) – Former cryptocurrency executive Nishad Singh is set to be sentenced on Wednesday for his role in his imprisoned former boss Sam Bankman-Fried’s theft of about $8 billion in customer funds from the now-bankrupt FTX exchange.
Singh, who has pleaded guilty to six felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. Singh in a plea deal with prosecutors admitted to his role in what they have called one of the biggest financial frauds in U.S. history and for acting as a “straw donor” in some of Bankman-Fried’s millions of dollars in political donations.
Bankman-Fried, 32, is serving a 25-year prison sentence at the Metropolitan Detention Center in Brooklyn stemming from the November 2022 collapse of the FTX exchange he founded.
Singh, 29, is FTX’s former chief engineer. He is expected to receive a far lesser sentence from U.S. District Judge Lewis Kaplan during a hearing scheduled for 3 p.m. ET (1900 GMT) in federal court in Manhattan. Prosecutors urged leniency while Singh’s lawyers recommended that he serve no prison time.
“Singh provided substantial assistance to the government in its investigation and prosecution of wrongdoers, and in its recovery of assets for victims,” the U.S. attorney’s office in Manhattan wrote in an Oct. 23 court filing.
Kaplan last month sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research, to two years in prison. The judge praised her cooperation, but said that such assistance could not be a “get out of jail free card” in a case as serious as this one.
Singh’s lawyers wrote in an Oct. 16 court filing that he joined the conspiracy relatively late, after Bankman-Fried and Ellison had already decided to use billions of dollars of FTX customer funds to plug losses at Alameda.
Bankman-Fried rode a boom in cryptocurrency prices during the COVID pandemic to a net worth by October 2021 of, according to Forbes magazine, $26 billion. He gained prominence as a prolific donor to philanthropic causes and Democratic politicians.
His wealth evaporated when FTX collapsed amid a flurry of customer withdrawals.
Singh testified during the trial that he confronted Bankman-Fried about a massive shortfall of customer funds during an hourlong conversation held in September 2022 on the balcony of a $35 million Bahamas penthouse they shared. Singh said Bankman-Fried assured him he would raise more funds and cut costs.
Bankman-Fried is appealing his conviction and sentence, arguing that Kaplan wrongly excluded evidence showing he thought FTX had enough funds to cover customer withdrawals.
Gary Wang, a third former FTX executive who cooperated with prosecutors, is scheduled to be sentenced on Nov. 20.
Source: Cryptocurrency - investing.com
