FTX executive Nishad Singh's lawyers have requested that the sentence be completed. They say Singh was late to the plot and may have saved the Japanese subsidiary. Singh was sentenced a month after the same judge sentenced Carolyn Ellison to two years in prison.
Once Announced Japan may have one person to thank for that distinction, as “the safest place to be an FTX customer,” according to recently filed court documents.
Former FTX executive Nishad Singh, 29, pleaded guilty to one count of wire fraud, three counts of conspiracy to defraud, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the US by violating campaign finance laws.
Singh will be sentenced at the end of the month. In a memo asking US federal judge Louise Kaplan for leniency, the software engineer's lawyers said he had “survived a life of extraordinary good deeds”, including efforts to retain FTX CEO Sam Bankman-Fried within two months. Fraud in the company was its spectacular downfall.
One of those efforts may have saved Japanese customers a lot of money.
“FTX Japan holds its customer assets in a specific type of 'cold wallet' that is Bankman-Fried and [Gary] Wong was unable to access,” Singh's attorneys wrote, referring to FTX's co-founder and chief technology officer.
“Bankman-Fried and Wang told the COO of FTX Japan to switch to a different system that would give them access to those funds.”
Singh prevented FTX Japan's chief operating officer from switching to a different system “certainly because he knew Bankman-Fried and Wang could use the funds properly,” the lawyers wrote.
“In FTX's final days, this meant that FTX Japan customer funds were not properly used to repay debt owed to non-Japanese FTX customers.”
Join the community to get our latest articles and updates
Three months after FTX declared bankruptcy, it became its Japanese subsidiary First To reopen customer withdrawals.
This was seen as a victory for Japan's strict crypto regulations, which require customer cash to be stored with a third party such as a Japanese bank or trust company, as well as the separation of customer- and exchange-owned assets.
In June, the Japanese company bitFlyer Said It will acquire FTX Japan and turn it into a crypto custody firm.
Punishing the 'merciful king'
Last month, Kaplan sentenced Carolyn Ellison, the star witness in the trial against Bankman-Fried, to two years in prison, although he called her “very, very substantial cooperation” with prosecutors.
Ellison was the CEO of FTX's sister company, Alameda Research, whose massive losses Bankman-Fried tried to use FTX customers' money for.
She was also his on-again, off-again girlfriend, and her emotional testimony was perhaps the most dramatic moment of the five-week trial last year. Her lawyers asked Kaplan to give her a deadline.
“I've seen a lot of collaborators in 30 years here. Ms. I've never seen anyone like Ellison,” the judge said, adding that he failed to find “the slightest error of fact, the slightest inconsistency” in her testimony.
But she was involved in one of the worst frauds in financial history, and the judge handed down a 24-month sentence saying the collaboration “shouldn't be a get out of jail free card.”
Singh's attorneys also urged Kaplan to sentence Singh.
They cited his “extraordinary” circumstances, including his relatively limited role in the collapse of FTX and his “prompt and exemplary” cooperation with prosecutors.
“He doesn't tone down his behavior; He pleaded guilty to serious crimes at the outset of this case and will regret his actions for the rest of his life,” his lawyers wrote.
“But his sentence must find that Nishad did not join the conspiracy in this case – the theft of FTX customer funds – until September 2022, just two months before FTX's collapse, and after Sam Bankman made key decisions. -Fried and Carolyn Ellison used billions of dollars in customer funds to shore up Alameda's finances and repay its creditors.
Accompanying the filing are more than 200 pages of letters from friends, family and colleagues who once called him “the king of kindness.”
Since the collapse of FTX, Singh has found full-time work as a software engineer outside of the finance and crypto industries and is engaged to longtime girlfriend Claire Watanabe, according to the letters.
'Criminal error in judgment'
Growing up in the Bay Area, Singh was childhood friends with Bankman-Fried's younger brother. He graduated from the University of California, Berkeley, majoring in electrical engineering and computer science.
In late 2017, Singh joined Alameda, impressed by its employees' commitment to effective philanthropy, which encourages followers to pursue high-paying careers so they can donate their earnings to low-cost charities.
Although a novice programmer when he joined Alameda, he rose through the ranks. By the time FTX collapsed, Singh was the company's head of engineering and its third largest shareholder.
In September 2022, Ellison and Wang told him that Alameda had borrowed billions from FTX customers.
When Singh testified at the Bankman-Fried hearing, he said he was stuck because he feared his departure would lead to the company's downfall.
“It was panicked, self-delusional and ultimately a criminal lapse in judgment,” his lawyers wrote.
“Nishad knows that staying with FTX means hiding the existence of the hole from customers, and in these circumstances takes routine steps that perpetuate the fraud.”
Alex Gilbert News'Diffie correspondent from New York. You can reach him at [email protected].
