A former FTX engineer testified this week in the trial of Sam Bankman-Fried (SBF) revealing his involvement in the cryptocurrency exchange imploding last year.
Nishad Singh took to the Federal Court in New York to outline his role in the downfall of FTX in November 2022 and what led to him being ‘blindsided and horrified’ when investors lost billions of dollars.
The jury was told by Singh that he was first alerted to funds being directed to FTX sister firm Alameda Research following a meeting with SBF in September 2022, which outlined the extent of the exchange’s financial troubles.
Singh confirmed that the billions of user funds sent to Alameda from FTX left a huge financial hole in both firms’ balance sheets and upon learning of this, he came to the realisation he had put “five years of blood, sweat, and tears” for something that “turned out to be for something evil.”
The former FTX Head Engineer stated he felt ‘betrayed’ and recalled a time he spoke to SBF on the balcony of their apartment in the Bahamas.
He shared that “Caroline (Ellison) is really freaked out, and so am I”, as FTX borrowed up to $13bn but had $5bn in reserves to pay back their depositors.
Singh revealed he asked SBF “how much are we short?” during their conversation on the apartment balcony, to which SBF responded that this was the “wrong question” and viewed it as a way to ask “How can we deliver?”
Singh admitted to making key changes to the codes of FTX and facilitated special privileges to Alameda and stayed working for the exchange after learning in that September meeting of the financial troubles that were on the horizon.
He also told jurors the reason he stayed working at FTX was due to SBF becoming insistent on keeping him in his role, as Singh told the court, “how could I live with myself if my departure precipitated a fall that could’ve been avoidable?”
Singh also recalled several conversations he had with SBF on the use of investor funds and how he thought in his own view was “unnecessary”.
Ellison, former CEO of Alameda, also testified last week on SBF’s central role in FTX operations prior to its collapse.
She and Singh are two of the strongest witnesses for the prosecutor’s case, with both taking the stand to drive home the narrative that SBF was the key decision maker behind the crypto exchange.
Last week, Ellison testified that Alameda was receiving money from FTX for its own personal investments to make Alameda’s balance sheet “look less risky to investors.”
The ex-FTX engineer, as well as Ellison, have already pleaded guilty to multiple counts of fraud and admitted to their role in the collapse of the company.
Reports out of New York court believe the DOJ is still on course for its case by 26 October as the defence is still targeting to make statements by either 7 or 8 November.