Former FTX Executive Slams SBF For “Excessive Spending”
- Singh joins other former FTX executives to testify at the ongoing SBF trial.
- Singh claimed Bankman-Fried used FTX customers’ funds to finance his extravagant lifestyle.
- The former FTX executive claimed Bankman-Fried made the ultimate decision at both FTX and Alameda Research.
A former senior executive at the once-dominant FTX cryptocurrency exchange, Nishad Singh, testified on Monday that Sam Bankman-Fried (SBF), his former boss, had engaged in massive and wasteful spending sprees with customer funds that “reeked of excess.”
Singh claimed to have fallen out with SBF over the mismanagement of funds used to invest in start-ups, buy luxury real estate, and sign prominent figures like Larry David, Steph Curry, and Tom Brady to endorse the firm.
The 28-year-old former engineer said he felt “embarrassed and ashamed” about one investment FTX made in a company called K5, which was connected to several celebrities. Singh said Bankman-Fried raved about meeting several A-listers at an event connected to the company. Bankman-Fried then considered investing hundreds of millions of dollars into the company.
Singh told the court that he “was worried about partnering with K5 and giving them this much money would be toxic to FTX and Alameda culture.”
Singh also revealed that he had discovered the $8 billion hole in FTX client deposits roughly two months before the company’s collapse late last year. He claimed that a large portion of the missing funds had been used to fund Bankman-Fried’s extravagant spending.
Singh is one of three senior former FTX executives who have entered guilty pleas to fraud and offered to cooperate with the prosecution investigating the demise of FTX in exchange for leniency. Gary Wang and Caroline Ellison, the other two, stated in their testimony last week that SBF gave them orders to commit crimes that resulted in the collapse of FTX.
FTX was Bankman-Fried’s empire, which he allegedly ran with some of his closest friends. For example, Singh is a close friend of Bankman-Fried’s family and played a role in building FTX into the renowned company it was before its ultimate fall.
Prosecutors claim that Singh, at Bankman-Fried’s instructions, designed a computer code that allowed Alameda to borrow practically unrestricted amounts of money from FTX clients. In addition, Singh was one of the FTX executives who lived in Bankman-Fried’s luxury home in the Bahamas.
Singh, who claimed to be a billionaire while at FTX, said SBF had significant influence at both FTX and Alameda and was “ultimately” responsible for the decisions at both firms. He confessed to having “been intimidated by Sam,” calling the FTX founder a “formidable character.” However, the 28-year-old added that “over time, that eroded.”
Singh testified that he once pushed back on Bankman-Fried’s decision, but the FTX boss got “visibly mad” and accused him of “sowing seeds of doubt in the company.”
Bankman-Fried is accused of masterminding a plot to transfer billions of dollars from FTX customer deposits into his trading company, Alameda Research. The prosecution states that he also invested the money in venture capital, bought real estate, and made political donations.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
