It was another bad day in court for Sam Bankman-Fried on Tuesday, as a rogue prosecution witness took the stand and testified about “heinous criminal” activity on crypto exchange FTX.
The damage came when Bankman-Fried’s own lawyer cross-examined Nishad Singh, a former FTX executive who was once close friends with Bankman-Fried’s little brother.
Singh told jurors that he considered leaving the company because FTX allegedly decided to let Alameda Research, Bankman-Fried’s trading firm, steal customer deposits to fund risky investments and pay off loans.
“The extent of the misconduct was enormous,” Singh testified.
Singh’s hands were also not clean. Around October 2022, Singh paid $3.7 million for a home on Orcas Island, Washington, using funds from FTX — even though he knew the clients were at risk of losing their money. He acknowledged in court that the purchase was “outrageous, unnecessary and selfish” and said he agreed to forfeit the property as a small gesture of restitution.
Singh pleaded guilty in February to six counts, including conspiracy to commit money laundering and conspiracy to commit securities fraud. He said he hoped for a lenient sentence given his cooperation with prosecutors.
Bankman-Fried, meanwhile, faces seven counts in the trial; Five others were released before trial due to complications surrounding his extradition from the Bahamas, but he could face trial on those charges next year.
Singh also spoke about his discomfort with Bankman-Fried’s lavish spending and said he had thought about moving out of their shared penthouse in the Bahamas several times. (He didn’t.) He said he consulted with lawyers – including Bankman-Fried’s father, Joseph – about the massive loans he received from the company. And he remembered developing political spending strategies with Bankman-Fried’s mother, Barbara. (Singh pleaded guilty to campaign finance violations for allegedly participating in a straw donor scheme with Bankman-Fried and Ryan Salame, another former FTX executive; Bankman-Fried’s mother was not charged with a crime.)
Before becoming head of technology at FTX, Singh spent two years at Alameda Research. At one point during the company’s rise, he was a billionaire, he testified, and he distributed millions of dollars to his friends and family, taking them along on the luxury trip.
After FTX collapsed in November 2022, Singh said he contemplated suicide for months. He appeared confident, if verbose and nerdy, in court this week. As he left the courtroom Tuesday afternoon, he didn’t make eye contact with anyone, especially not his former boss.