When he found out in September 2022 that Alameda had used FTX customer funds, Nishad Singh said he asked to speak to Alameda’s founder and FTX’s CEO. They were both Sam Bankman-Fried, of course. Singh and Bankman-Fried met around 8 or 9 p.m. local time on the balcony of their shared penthouse in the Bahamas, which was large enough to accommodate a pool. As Bankman-Fried lay in a white chaise longue, Singh paced anxiously.
“I’m not sure what I have to worry about,” Bankman-Fried told Singh, according to Singh’s court testimony today.
What about the $13 billion Alameda owes FTX, Singh wanted to know.
“Right, that,” Bankman-Fried responded in Singh’s retelling. “We lack a bit of ability to deliver.”
How short? Well, they could pay back $5 billion of the money – a whopping $8 billion less than they owed.
“I felt really betrayed.”
To really highlight Singh’s statement, prosecutor Nicolas Roos uploaded a photo of the balcony in question. Barbara Fried, the defendant’s mother, expressed disbelief when the luxury balcony appeared on the screen. As Singh recounted the story of the conversation, Fried appeared excited, occasionally glancing in her son’s direction.
Asked what he thought about discovering the hole in the balance sheet, “I was surprised and horrified,” Singh said. “I felt really betrayed.” But he felt like he couldn’t leave. He couldn’t live with himself if his departure meant a decline in FTX, and the decline was avoidable. Bankman-Fried had told Singh he was indispensable.
Like Gary Wang before him, Singh was briefly a paper billionaire – owning “6 or 7” percent of FTX. He received a salary of $200,000 and, as of 2020, shares in FTX in lieu of bonuses; Previously, his bonuses were up to $1 million. He was also a longtime friend of Bankman-Fried’s younger brother, Gabe, and had known the defendant since high school. In his black suit and red tie, Singh looked much younger than his age, like a member of a high school mock trial team. As he was leaving the stands during our lunch break, he was hit with an asthma inhaler.
Singh has 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.
“I was always afraid of Sam.”
“I was always afraid of Sam,” he said. (The defense objected and the decision was overturned.) Singh said that Bankman-Fried was an “impressive character, brilliant.” Singh also described the actions he and his co-conspirators took as “evil.”
Singh came late to the conspiracy, only learning about it in September 2022. But even before that, he was “embarrassed and ashamed” 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 doubt in the company’s decisions.” This comment was made in front of other people in the office, which Singh found “quite humiliating.”
That was the introduction to the way Bankman-Fried distributed his money. One of the investments was Genesis Digital Assets, a Bitcoin mining company. The idea of Bitcoin mining puzzled Judge Lewis Kaplan, who asked for an explanation. (This was one of several cases where this occurred with the jargon Singh used in his testimony.) Singh explained that these involved banks of computers solving puzzles to get a reward and the blockchain a block of transactions to add.
Kaplan sighed. “Well, I’m sure that’s the best I’ll get.” The courtroom laughed.
“Kendall and Kris Jenner, I honestly can’t tell you what they do.”
There was also a discussion about 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 a dinner with guests including Hillary Clinton, Doug Emhoff, Katy Perry, Orlando Bloom, Leonardo DiCaprio and Jeff Bezos described , Ted Sarandos, Kendall Jenner, Kris Jenner and Corey Gamble. Singh read the names aloud and briefly described what each did – even though he didn’t recognize either Sarandos or Gamble.
“Kendall and Kris Jenner, I honestly can’t tell you what they do,” he said, triggering another wave of laughter. It had been a funnier day in court than most.
Bankman-Fried viewed K5 as a “one-stop shop” for relationships and wanted to inject up to $1 billion in long-term capital into the company, which Singh objected to. Singh believed the company was “toxic to FTX and the Alameda culture,” but Alameda Research Ventures invested anyway.
We then saw a table of endorsement deals, including those for Steph Curry, Tom Brady, Gisele Bundchen, FTX Arena and Larry David. In total, the Bankman-Fried companies spent $1.13 billion on advertising deals.
“Sam is a fan of views.”
Singh’s statement hurt Bankman-Fried because he was very loose with money – he also invested largely in real estate. We saw a spreadsheet of the properties FTX had rented and purchased, including Bankman-Fried’s two apartments and the apartment where his parents lived. (At this point, Joe Bankman and Barbara Fried switched notepads, apparently their way of passing notes.) As for the penthouse, Singh didn’t want it, and neither did some of the other members of the group. But “Sam really liked this one,” he said. “Sam is a fan of views.” Eventually, Bankman-Fried told his future roommates that he would pay them $100 million to end the drama, which Singh took as a signal to keep his mouth shut.
Even before he knew about Alameda’s special access to FTX, Singh was involved in other shady transactions. For example, in December 2021, Singh executed some retroactive transactions that pushed FTX’s revenue “over the edge” to $1 billion. He did this by changing the rules for staking a token, Serum, so that FTX received 25 percent of the rewards. This information was provided to the auditors, he testified.
Singh also testified about “allow_negative,” the damning code Gary Wang talked about during his own testimony. Singh’s initial understanding was that part of it was to let Alameda transfer the FTT token invented by Wang and Bankman-Fried. Bankman-Fried assigned Singh to the project, and Wang laid out the exact details of how it would work. When he later found out how else it was being used, Singh said, “This appeared to be a real abuse of a feature that up until that point I believed served FTX.” But when he found out how big the hole was on the FTX balance sheet, he knew: “It couldn’t have been a mistake.”
In August 2022, Singh transferred the money Alameda owed to the account of “Korean friend” seoyuncharles88, without explaining why that name was chosen. The reason: to prevent Alameda from having to pay interest on the debt.
Ellison literally told him: “That’s impossible.”
In September 2022, Singh discovered that Alameda did not have nearly enough collateral to cover its obligations, excluding its enormous credit line. He said there were periods when Alameda was $10 billion short of collateral. Therefore, Bankman-Fried suggested that Singh, Wong, Ellison, and Bankman-Fried transfer their personal Serum tokens to Alameda. Then Singh could backdate the transfer to make it appear as if the money had been there the whole time. The idea was to deceive the ultimate recipient of the data: the Commodities Futures Trading Commission. Singh refused.
He recalled the same conversation about the Alameda closure that both Ellison and Wang described in their testimony. Singh suggested that Alameda’s accounts with FTX be closed and the company trade elsewhere. Ellison literally told him, “This is impossible.” According to Singh, it was at this point that he discovered that Alameda was undeniably using FTX customer funds. Why else should it be impossible? “It was absolutely devastating,” he said.
And that’s why he wanted to meet Bankman-Fried on the balcony; His bedroom was often used for meetings by others and he wanted privacy to discuss the situation. They met a second time at Bankman-Fried’s private apartment after he returned from a trip to the Middle East to try to raise capital.
“I’m really not feeling well,” Singh said he told Bankman-Fried. Barbara Fried’s head was in her hands as he testified; she looked like she was about to cry.
Singh tried to boost spending in the hope of filling the hole
As Singh spoke to him, he noticed that Bankman-Fried seemed nervous; He gritted his teeth and closed his eyes, which Singh said were signs of when Bankman-Fried was angry. “I ended up apologizing to him for asking for the meeting because I realized it was so unwelcome,” Singh said.
Singh has tried to rein in spending in hopes of plugging the hole, he said. But then in September Bankman-Fried invested $250 million in Modulo Capital, a hedge fund run by some of his partners, and later in Anthony Scaramucci’s Skybridge Capital.
That’s when the really weird stuff in the deposition began: Singh started talking about his political donations. Apparently, several people, including Ryan Salame, the former FTX executive, had access to Singh’s bank accounts. Money from Alameda would be transferred and then sent to approved uses. This was coordinated in a Signal chat called “Donation Processing,” which included Gabe Bankman-Fried. “My job 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, “About that.” He then messaged the group, telling Singh that he had his E emails to approve the transaction, as well as those from five others.
Singh also testified that he signed blank checks from another bank account at Gabe Bankman-Fried’s request
Singh also testified that he signed blank checks from another bank account at Gabe Bankman-Fried’s request. Gabe used the money to donate to Guarding Against Pandemics, his advocacy group. At first, Singh had given him her credit card, but it no longer worked. There were also problems with a PayPal account. So an assistant was flown to Singh with checks for him to sign.
After discussions in September, Singh understood that the money came from customer funds, he said.
When November came and FTX’s collapse began, Singh said he was suicidal. At one point, he asked Bankman-Fried to clarify that the FTX CEO orchestrated the whole thing. That didn’t happen.
I was impressed throughout the process by how the inner circle at FTX and Alameda were the people closest to Bankman-Fried: his college roommates Adam Yedidia and Gary Wang; his ex-girlfriend Caroline Ellison; his brother’s childhood friend, Singh; his brother Gabe; and of course Barbara Fried and Joseph Bankman.
Even if Sam Bankman-Fried believed he was innocent, he probably could have spared some of these people by doing what Singh asked him to do in November 2022: accept responsibility and turn himself in. Instead, I see Bankman-Fried’s mother crying 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 was the first to cooperate. Singh came second. Ellison finished third.