Former FTX Director Testifies Against Sam Bankman-Fried
In a court hearing, Nishad Singh, the former director of engineering at FTX, revealed details about a software bug that led to billions in missing funds and excessive spending by his former boss, Sam Bankman-Fried. Singh explained that a coding error he helped create prevented accurate accounting of FTX and Alameda Research, resulting in Alameda secretly accumulating an $8 billion negative balance using customer funds. He also highlighted Bankman-Fried’s extravagant spending, including a $30 million penthouse and over $1 billion on celebrity endorsements, real estate, and parties.
Concerns Over Excessive Spending
Singh expressed his concerns about Bankman-Fried’s lavish expenditures and questioned the growing debt of Alameda. However, his objections were dismissed by SBF. Singh felt betrayed and feared leaving due to the potential collapse of FTX. He described SBF pressuring him to take on more responsibilities while exhibiting physical “twitches” and expressing his need for Singh to handle tasks so he could focus on deals.
Illegal Political Donations
Singh disclosed that he processed political donations through his personal account at Wells Fargo as instructed by Bankman-Fried. He mentioned a Signal chat called “Donations Processing,” involving SBF’s brother Gabe, which was used for laundering funds. Singh testified that he used Prime Trust and Wells Fargo accounts to funnel contributions provided by Alameda to Democrats under his name for appearances.
Aiding Prosecutors as a Cooperating Witness
Following his guilty plea, Singh is now cooperating with prosecutors as a witness against Bankman-Fried. His testimony offers insights into the misuse of customer funds, coding errors within FTX, and the extravagant lifestyle surrounding SBF, all of which contributed to FTX’s eventual collapse.
Hot Take: A Shocking Revelation of Financial Mismanagement
The testimony of Nishad Singh against Sam Bankman-Fried sheds light on the dark side of the cryptocurrency industry. The software bug that allowed Alameda Research to accumulate an $8 billion negative balance using customer funds is a glaring example of financial mismanagement and negligence. Bankman-Fried’s excessive spending on luxury properties and celebrity endorsements raises questions about his priorities and the responsible handling of funds. This case serves as a reminder that transparency, accountability, and ethical practices are essential in the crypto world to protect investors and maintain trust in the industry.
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