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The SEC alleged that he created software code that allowed FTX customer assets to be transferred to Alameda Research and participated in a multi-year scheme to deceive investors. According to the complaint, Singh was aware that Bankman-Fried directed hundreds of millions of dollars of customer funds to Alameda to be used for loans and venture investments, even as it became clear there was a shortfall because of client money already sent to the hedge fund.
Singh is the third close associate of Bankman-Fried to plead guilty and sign on as a cooperating witness for the government.Credit:AP
The SEC said Singh withdrew about $US6 million ($8.9 million) from FTX as the platform neared collapse for personal use and expenses, including to buy a multimillion-dollar home and to donate to charity.
‘Fraud, pure and simple’
“We allege that this was fraud, pure and simple: while on the one hand FTX touted its supposed effective risk mitigation measures to investors, on the other Mr. Singh and his co-defendants were stealing customer funds using software code Mr. Singh helped create,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement.
The SEC said Singh is cooperating with its ongoing investigation into the alleged fraud at FTX.
Singh has provided prosecutors with a window into the political donations side of the FTX operation. He had given more than $US9.3 million to Democratic candidates and committees since 2020, according to campaign finance filings. In the last election cycle, he donated $US8 million. Among the largest recipients was Mind the Gap, a political action committee founded by Bankman-Fried’s mother that received $US1 million from Singh in April 2021.
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Last week federal prosecutors filed four additional charges against Bankman-Fried, accusing him of using FTX executives to make millions of dollars of political donations in hopes of influencing crypto regulation.
Damian Williams, the US attorney for the Southern District, said Singh’s guilty plea underscored “once again that the crimes at FTX were vast in scope and consequence.”
“They rocked our financial markets with a multibillion dollar fraud,” he said in a statement. “And they corrupted our politics with tens of millions of dollars in illegal straw campaign contributions. These crimes demand swift and certain justice and that is exactly what we are seeking.”
Bloomberg
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