Former cryptocurrency executive Nishad Singh, who once shared a $35m Bahamas penthouse with FTX founder Sam Bankman-Fried, has been spared prison time by a judge for his role in the theft by his imprisoned former boss of about $8bn in customer funds from the now-bankrupt exchange.
During a hearing in Manhattan federal court on Wednesday, United States District Judge Lewis Kaplan imposed no prison time, but ordered three years of supervised release. Kaplan credited Singh for cooperating with prosecutors and coming clean about his actions in what they have called one of the biggest financial frauds in US history.
Singh, who had pleaded guilty to six felony counts of fraud and conspiracy, testified last year as a prosecution witness in the trial that led to Bankman-Fried’s conviction on fraud and other charges. Singh, in a plea deal with prosecutors, admitted to his role in the fraud and for serving as a “straw donor” in some of Bankman-Fried’s millions of dollars in political donations.
“I am overwhelmed with remorse for the harm that I participated in and that I caused to so many innocent people,” Singh told the judge at the hearing. “I strayed so far from my values.”
Prosecutors had urged leniency for the 29-year-old Singh, FTX’s former chief engineer, in light of his cooperation. His defence lawyers recommended he serve no prison time.
Bankman-Fried, 32, is serving a 25-year prison sentence imposed by Kaplan stemming from FTX’s November 2022 collapse.
Last month, Kaplan sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research, to two years in prison.
The judge had also praised her cooperation, but said that such assistance was not a “get out of jail free card” in a case this serious.The judge told Singh that his involvement “was much more limited than, certainly, Bankman-Fried and Ellison.”
During the hearing, Singh said he looked up to and supported Bankman-Fried, even after coming to see him as deceptive and self-serving.
“I still have an enormous debt to society,” Singh added.
“You did the right thing,” Kaplan told Singh. “You immediately and truthfully – as far as I can see – fully unburdened yourself to the government about wrongdoing about which you were aware and which they quite clearly were not.”
Prosecutor Nicolas Roos told the judge that Singh deserved credit for coming forward and implicating himself by describing conversations that were not otherwise documented.
“It could have been very easy for Mr Singh to have denied everything,” Roos said.
“He wanted to right a wrong or at least start to make that effort and do the right thing,” Roos added.
Singh’s lawyer Andrew Goldstein told the judge that nearly all of the billions of dollars in customer funds were stolen before his client learned of the scheme.
“The overwhelming majority of the conduct that made it such a monumental crime took place before Nishad ever became involved,” Goldstein said, arguing that Bankman-Fried and Ellison were responsible for the decision to steal funds from FTX customers to pay Alameda’s lenders. “That was their crime. It was not Nishad’s crime.”
Goldstein said Singh’s brother, parents and fiance, among other family members, were present in court.
A 2017 graduate of the University of California, Berkeley, Singh lived with Bankman-Fried and seven other employees of FTX and its sister firm Alameda Research in a waterfront penthouse in the Bahamas, where the exchange was based. (AlJazeera)