In September 2022, when he discovered that Alameda had been using FTX client funds, Nishad Singh said he asked to speak to Alameda’s founder and FTX CEO. They were both, of course, Sam Bankman-Fried. Singh and Bankman-Fried met on the balcony of the penthouse they shared in the Bahamas, which was spacious enough to include a swimming pool, around 8 p.m. or 9 p.m. local time. While Bankman-Fried lay on a white chaise lounge, Singh paced anxiously.
“I’m not sure what there is to worry about,” Bankman-Fried told Singh, according to Singh’s testimony in court today.
What happens to the $13 billion that Alameda owes FTX? Singh wanted to know.
“Right, that,” Bankman-Fried responded to Singh’s recount. “We’re a little short on deliverables.”
What a short? Well, they could pay back $5 billion of the money—about $8 billion less than they owed.
“I felt really betrayed.”
To really set the scene for Singh’s testimony, prosecutor Nicolas Roos took a photo of the balcony in question. Barbara Fried, the defendant’s mother, was incredulous when the luxury balcony appeared on the screen. As Singh told the story of the conversation, Fried seemed agitated and occasionally glanced in her son’s direction.
When asked how he felt about discovering the hole in the balance sheet, “I was shocked and horrified,” Singh said. “I felt really betrayed.” But he felt that he couldn’t leave. He couldn’t live with himself if his departure meant FTX would fall and the fall would be avoidable. Bankman-Fried had told Singh he was indispensable.
Like Gary Wang before him, Singh had briefly been a paper billionaire: he owned “6 or 7” percent of FTX. He received a salary of $200,000 and shares in FTX in lieu of bonuses as of 2020; Before that, his bonuses had reached one million dollars. He was also a long-time friend of Bankman-Fried’s younger brother, Gabe, and had known the defendant since high school. Wearing a black suit and red tie, Singh looked much younger than he was, like a member of a high school mock trial team. When he came down from the stand while we were taking a lunch break, he received a dose of an asthma inhaler.
Singh pleaded guilty to six felonies. He says his co-conspirators in committing these crimes were FTX executives Ryan Salame and Gary Wong, Bankman-Fried and Alameda CEO Caroline Ellison. All of them have also pleaded guilty to various crimes, except Bankman-Fried.
“Sam has always intimidated me.”
“Sam has always intimidated me,” he said. (The defense objected to this and it was overruled). Singh said Bankman-Fried was a “formidable, brilliant character.” Singh also termed the actions he and his accomplice took as “evil”.
Singh was late to the conspiracy and did not find out about it until September 2022. But even before that, he was “embarrassed and embarrassed” by Bankman-Fried’s “excessive” approach to spending. Although he complained to Bankman-Fried, he was told that the real problem was that “people like me were sowing seeds of doubt in the company’s decisions.” That comment was made in front of other people in the office, which Singh found “quite humiliating.”
That was the introduction to how Bankman-Fried squandered his money. One of the investments was Genesis Digital Assets, a Bitcoin mining company. The idea of Bitcoin mining stumped Judge Lewis Kaplan, who asked for an explanation. (It was one of several times this would occur with the slang Singh used in his testimony.) Singh explained that these were banks of computers that solved puzzles to earn a reward and add a block of transactions to the blockchain.
Kaplan sighed. “Well, I’m sure that’s the best I’m going to get.” The courtroom laughed.
“Kendall and Kris Jenner, I honestly couldn’t tell you what they do.”
There was also talk of K5 Ventures, a venture capital firm run by Michael Kives. We saw a memo in which Bankman-Fried said Kives was “probably the most connected person I’ve ever met” and described a dinner with guests including Hillary Clinton, Doug Emhoff, Katy Perry, Orlando Bloom, Leonardo DiCaprio, Jeff Bezos. , Ted Sarandos, Kendall Jenner, Kris Jenner and Corey Gamble. Singh read the names aloud and briefly described what he did each, although he did not recognize Sarandos or Gamble.
“Kendall and Kris Jenner, I honestly couldn’t tell you what they do,” he said, prompting another wave of laughter. It had been a more fun day in court than most.
Bankman-Fried saw K5 as a “one-stop shop” for relationships and wanted to commit up to $1 billion of capital to the company over the long term, something Singh opposed. Singh deemed the company “toxic to FTX and Alameda culture,” but Alameda Research Ventures invested anyway.
We then saw a spreadsheet of endorsement deals, including those of Steph Curry, Tom Brady, Gisele Bundchen, FTX Arena and Larry David. In total, Bankman-Fried entities spent $1.13 billion on sponsorship deals.
“Sam is a sight freak.”
Singh’s testimony hurt Bankman-Fried for being very lazy with money, also investing in real estate. We saw a spreadsheet of properties FTX had rented and purchased, including Bankman-Fried’s apartments and her parents’. (At this point, Joe Bankman and Barbara Fried exchanged notepads, apparently their way of passing notes.) As for the penthouse, Singh didn’t want it, nor did other members of the group. But “Sam really liked this one,” he said. “Sam is a sight freak.” Finally, Bankman-Fried told his potential roommates that he would pay them $100 million to make the drama go away, which Singh took as a sign for them to shut up.
Even before learning about Alameda’s special access to FTX, Singh had been involved in other shady transactions. For example, in December 2021, Singh created some backdated transactions that pushed FTX’s revenue “over the line” to $1 billion. He did this by changing the rules on staking a token, Serum, so that FTX got 25 percent of the rewards. This information was provided to the auditors, he testified.
Singh also testified about “allow_negative,” the damning code that Gary Wang had talked about during his own testimony. Singh’s initial understanding was that, in part, he would allow Alameda to transfer the FTT token that Wang and Bankman-Fried had invented. Bankman-Fried assigned Singh to the project, and Wang provided the specific details on how it would work. Later, when he discovered how else it had been used, Singh said that “this seemed like a real abuse of a feature that he believed until that point” was in service of FTX. But when he discovered how big the hole in FTX’s balance sheet was, he knew “this couldn’t have been a mistake.”
In August 2022, Singh transferred the money Alameda owed him to the “Korean friend” account, seoyuncharles88, without explaining why that name had been chosen. The reason: to prevent Alameda from having to pay interest on the debt.
Ellison told him verbatim: “that’s impossible.”
In September 2022, Singh noted that Alameda did not have enough collateral for its obligations if the huge line of credit was not included. He said there were points where Alameda was $10 billion short on its guarantee. Bankman-Fried then suggested that Singh, Wong, Ellison, and Bankman-Fried transfer their personal Serum tokens to Alameda. Singh could then backdate the date of the transfer, making it look like the funds had been there all along. The goal was to deceive the eventual recipient of the data: the Commodity Futures Trading Commission. Singh refused.
He recalled the same conversation about the Alameda closure that both Ellison and Wang had described in their testimony. Singh suggested closing Alameda’s accounts at FTX and allowing the company to operate elsewhere. Ellison told him verbatim: “that’s impossible.” And it was then, according to Singh, that he discovered that, without a doubt, Alameda was using funds from FTX clients. Why else would it be impossible? “That was absolutely devastating,” he said.
And that’s why he wanted to meet Bankman-Fried on the balcony; Her bedroom was often used for other people’s gatherings and he wanted privacy to discuss the situation. They met a second time, in Bankman-Fried’s private apartment, after he returned from a trip to the Middle East to try to raise capital.
“I’m not really doing well,” Singh told Bankman-Fried, according to her testimony. Barbara Fried’s head was in his hands as she testified; It looked like she was crying.
Singh tried to reduce spending in hopes of closing the hole
As Singh spoke to him, he noticed that Bankman-Fried seemed nervous; He was grinding his teeth and closing his eyes, which Singh said was a sign of when Bankman-Fried was angry. “I ended up apologizing to him for requesting the meeting because I realized I wasn’t welcome,” Singh said.
Singh tried to reduce spending in hopes of closing the hole, he said. But Bankman-Fried then invested $250 million in Modulo Capital, a hedge fund led by some of his associates in September, and later also in Anthony Scaramucci’s Skybridge Capital.
That’s when the really weird shit started in the testimony: Singh started talking about his political donations. Several people, including Ryan Salame, the former FTX executive, reportedly had access to Singh’s bank accounts. Alameda’s money would be transferred and then sent to approved causes. This was coordinated in a Signal chat called “donation processing,” which included Gabe Bankman-Fried. “My role was to click a button” to approve the transaction, when a confirmation request arrived in his email, Singh said.
In one conversation, a political consultant wrote: “Can we get @NishadSingh’s $20,000 for the Delaware Democratic Party today?” Salame replied: “On that.” She then messaged the group telling Singh that he needed to check his email to approve the transaction, as well as five other people.
Singh also testified that he signed blank checks from another bank account, at the request of Gabe Bankman-Fried.
Singh also testified that he signed blank checks from another bank account, at the request of Gabe Bankman-Fried. Gabe used that to donate to Guarding Against Pandemics, his advocacy group. First, Singh had given him his credit card, but it stopped working. A PayPal account also had problems. So an assistant was flown to Singh with checks for him to sign.
After the September conversations, Singh understood the money came from client funds, he said.
When November rolled around and FTX’s collapse began, Singh said he was suicidal. At one point, he asked Bankman-Fried to clarify that the FTX CEO had orchestrated the whole thing. That didn’t happen.
Throughout the trial I have been struck by how FTX and Alameda’s inner circle were the people closest to Bankman-Fried: her college roommates Adam Yedidia and Gary Wang; his ex-girlfriend Caroline Ellison; the childhood friend of his brother, Singh; his brother Gabe; and, of course, Barbara Fried and Joseph Bankman.
Even if Sam Bankman-Fried believed himself innocent, he probably could have saved some of these people by doing what Singh asked him to do in November 2022: take responsibility and turn himself in. Instead, I’m watching Bankman-Fried’s mother cry. in court as a man who has known Bankman-Fried since high school testifies against him.
On November 20, 2022, Singh had his first meeting with prosecutors. From the inner circle, Wang cooperated first. Singh was second. Ellison was third.