New York: A 27-year old Indian American engineer at a crypto asset trading platform has pleaded guilty to charges of commodities fraud.
Nishad Singh was the former co-lead engineer of FTX Trading Ltd. His involvement in a multiyear plan to mislead equity investors in FTX, Singh founded the cryptocurrency trading platform with Samuel Bankman-Fried and Gary Wang, has led to federal charges being brought against him.
In December last year, federal authorities had charged Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX. Singh was accused by the Securities and Exchange Commission. In a related move, Singh was also charged by the Commodities Futures Trading Commission (CFTC) and the US Attorney's Office for the Southern District of New York.
Singh entered a guilty plea as to commodities fraud and other charges in the separate, parallel action against him in the Southern District of New York. Despite false representations by Bankman-Fried to investors that FTX was a secure crypto asset trading platform with sophisticated risk mitigation measures to protect customer assets and that Alameda was just another customer with no special privileges, Singh allegedly created a software code that allowed FTX customer funds to be diverted to Alameda Research, a crypto hedge fund owned by Bankman-Fried and Wang.
The complaint alleges that Singh knew or should have known that such statements were false and misleading.
Singh is charged with actively participating in the plot to defraud FTX's investors, according to the complaint. Singh withdrew about $6 million from FTX as the company was on the verge of bankruptcy for personal use, including the purchase of a multimillion-dollar home and payments to charitable organisations.