Image Source: Bloomberg
In the US, another top manager at the now-defunct cryptocurrency company FTX pleaded guilty to criminal charges.
Nishad Singh, who used to be in charge of engineering, admitted to six counts on Tuesday, including three counts of working together to commit fraud.
Sam Bankman-Fried, who started FTX, has been accused of 12 crimes, all of which he says he did not do. He changed his plea because of this.
Last year, FTX went out of business, which made it hard for many people to get their money back.
Prosecutors say that the fall was caused by Mr. Bankman-huge Fried’s plan. So, he is free on a $250 million bond while he waits for his trial.
Mr. Bankman-Fried was once known as the “King of Crypto,” but now he is being accused of sending customer deposits at FTX to his hedge fund, Alameda Research, where they were used for political donations, buying property, and other investments.
When they were kids, Mr. Singh was Fried’s friend, the brother of Bankman. He worked at Alameda Research and later joined the group that started FTX.
He had given much money to political campaigns over the past few years, just like Bankman-Fried.
According to court documents, he wrote the software code that gave Alameda special treatment on the FTX platform and helped Bankman-Fried backdate financial transactions to make FTX’s financial performance look better than it was.
The filings said that the 27-year-old knew that Bankman-Fried was transferring FTX customer funds when the company was in a bad spot after the crash of crypto prices in 2022.
According to the documents, Singh took out $6 million for himself and his spending in 2022, even though the company was about to go bankrupt in November.
Singh, also charged with criminal and civil fraud by financial regulators, said, “I am so sorry for my part in all of this.”
During the hearing, he said he would give back all the money he got from the scheme.
Caroline Ellison, the former CEO of Alameda, and Gary Wang, the former CTO of FTX, were two other top members of Bankman-management Fried’s team. Both of them pleaded guilty in December.
Officials said that Mr. Singh was now helping the prosecutors who were looking into Mr. Bankman-Fried.
Sam Bankman-Fried facing four new charges
Four new criminal charges have been brought against the man who used to run the now-defunct cryptocurrency exchange FTX. The charges say that he and others worked together to give illegal money to political campaigns and steal money from banks.
Sam Bankman-Fried has already said he is not guilty of stealing money from customers and investors.
Last year, FTX went out of business, making it hard for many people to get their money back.
There are now 12 charges against Mr. Bankman-Fried.
A person who worked for Mr. Bankman-Fried didn’t want to say anything.
In the most recent charges, Mr. Bankman-Fried was accused of working with two other former FTX executives to give tens of millions of dollars to US politicians to get them to pass laws that helped the company.
Prosecutors say that the donations came from corporations or “straw” donors. People say that this is how Mr. Bankman-Fried got around the contribution limit.
They said that Mr. Bankman-Fried told one executive to give money to candidates on the left and the other to give to the right. Many of the donations came from his Alameda Research hedge fund and FTX customer funds.
Bankman-Fried has already said he is not guilty of using customer deposits at FTX to pay for Alameda Research, buy property, and give money to politicians.
After being caught in December, he was set free on a bail package worth $250 million (£208 million).
But if he is found guilty, he could go to prison for over 100 years.
Judge Lewis Kaplan set October 2 as the trial date.
FTX did many damages to the crypto industry
When FTX went down last fall, it was a bad sign for crypto. It hurt the industry’s credibility and made people less likely to trust it. CEO and Founder of Ava Labs, Emin Gün Sirer, says that this damage is very big.
Sirer said he had seen the digital assets industry “grow from nothing” into what it is today. He also said that as a professor of computer science at Cornell University, he worked hard to help people learn about blockchain technology by briefing politicians and holding workshops.
Sirer said it keeps him up at night that Bankman-Fried set the industry back so far. But he also knows that regulatory circles are changing, which could be “very bad” for people who work in crypto.
Last summer, when the prices of digital assets went down, FTX founder Sam Bankman Fried’s reputation went through the roof. In 1907, the 30-year-old man who rushed to help crypto firms in trouble was compared to John Pierpont Morgan.
But when FTX went down in November last year, Banker Fried’s went in the opposite direction. After FTX’s FTT token dropped sharply and caused a rush on the exchange, the company went bankrupt. This happened because FTX needed more customer assets on hand to cover the withdrawals.
Sirer said that the way Bankman-Fried acted kept him from being questioned. People thought he was a genius who couldn’t be questioned because he had “tousled hair” and spent so much on marketing.
Read Also: FTX: John Ray to restore bankrupt crypto firm
Sirer said that a good conversation with regulators is the best way to deal with the effects of FTX’s failure, which led to the failure of dozens of other companies and projects.
