When Nishad Singh took to the stand during the trial of Sam Bankman-Fried (SBF), he revealed that his “five years of blood, sweat, and tears turned out to be for something evil”.
The former FTX Engineer knew SBF better than most and like many of the key figureheads at the collapsed cryptocurrency exchange, entered a plea deal to testify against the disgraced ex-crypto kingpin at the New York Federal Court.
But what was mentioned in a previous article covering the GBG ‘Downfall of the Crypto King’ event, was the stark revelation that Singh – 27-years-old – and a large majority of the FTX staff base were all extremely young, and running an extremely lucrative business.
Whilst it would be unfair to assume that anybody under the age of 30 is completely inept in holding a key role in running a multi-billion dollar business, it would be fair to criticise and be sceptical of a multi-billion dollar company that had no board of directors or no clear structure at the top.
This was revealed by Storm Theunissen, the Director behind the BBC Panorama episode ‘Downfall of the Crypto King’, who stated that FTX having no board members and most of the key figureheads looking like interns, should have been the start of the red flags surrounding the exchange.
One of the key witnesses and individuals who testified against SBF was Caroline Ellison, the 28-year-old tasked with being the CEO of Alameda Research, the crypto hedge fund that Bankman-Fried launched that made more than 100 investments totalling as much as $2.3bn during its time.
Whilst Alameda, alongside FTX, began to flourish in the early parts of the decade, so too did Ellison’s relationship with SBF as the two were found to have a romantic relationship during her time working alongside one another.
Despite Bankman-Fried previously stating that their relationship was ‘brief’, Ellison was promoted to CEO of Alameda in August 2022, albeit, having only worked there since 2017 and having no equity in the firm, later admitting in the trial her romantic relationship “created some awkward situations”.
Was this a move by SBF to maintain the adulation and clean-cut facade he designed in front of the rest of the world, or would the decision to make Ellison the CEO of Alameda set the wheels in motion for the most notorious crypto collapse in its relatively short history?
As we all know by now, Alameda was receiving up to $10bn of FTX investors’ money to balance the books of capital it could not owe back to the crypto exchange. A few moves from Binance in dropping its holdings of FTT – the FTX altcoin – and no less than a week later, FTX and Alameda were filing for bankruptcy.
Ellison, Singh and more key figureheads were charged on several counts of fraud and wire fraud and entered plea deals to testify against SBF, in a trial that was dubbed by Joshua Oliver as an ‘extraordinary psychodrama’.
The Financial Times Correspondent had the best seat in the house at the New York Federal Court last October, detailing to the onlooking audience at the GBG event one month removed from the drama that ensued.
Oliver recapped some of the more revealing highlights from the trial, such as the many times witnesses cried on the stand and former friends of Bankman-Fried revealing his primary role in the collapse of the exchange, in particular, Ellison.
One of the more revealing pieces of evidence of the trial came when prosecutors played an audio recording of a staff meeting that took place months prior to November’s collapse, with Ellison detailing that SBF knew of the company’s financial worries and laid them bare.
Even FTX Co-Founder Gary Wang, another of the prosecution’s key witnesses, revealed that he was one of the key individuals that enabled Alameda to take mass amounts of customers’ money on SBF’s accord.
These were some of Bankman-Fried’s closest confidants revealing some of the most damning revelations about his primary role in the collapse of the crypto exchange, but did the mask slip even a little?
The former FTX boss believed in his carefully curated image so much – even when Ellison revealed to the jury the nerdy, clean-cut persona was a facade – he testified in his own defence.
Many media outlets believed this would put the nail in his own coffin, but even when the unanimous verdict was reached and SBF was found guilty on all seven counts, he refused to budge and still claims he remains innocent.
Is this a man so intertwined with a persona that he has morphed into the man he created? Or is he trying to save face knowing his actions were laid bare by some of those he considered his friends?
What we know is real is the billions upon billions of dollars customers lost in the midst of the madness that ensued, and why global regulators began to hit the red button to initiate talks on how to safely safeguard them so this large-scale collapse never occurs again.
In the final instalment of Payment Expert’s three-parter, Sunil Kavuri, a speaker at the GBG event revealed how he lost £2.1m as a result of the FTX collapse and what has been done to recoup those assets.