Nishad Singh (left), former director of engineering at FTX cryptocurrency derivatives exchange, and Claire Watanabe, former senior director at FTX cryptocurrency derivatives exchange, arrive at a New York court on October 30, 2024.
Mackenzie Sigalos | CNBC
Former FTX executive Nishad Singh was sentenced to prison time and three years of supervised release on Wednesday, becoming the fourth former employee of the failed cryptocurrency exchange to be punished. Singer was also ordered to forfeit $11 billion.
Singer faces up to 75 years in prison, but New York Judge Lewis Kaplan noted that his cooperation with the government was “excellent” and said he had full confidence that Singer was involved in the fraud to a much greater extent than FTX founder Sam Bankman-Fried Or FTX founder Sam Bankman-Fried or Caroline Ellison, the former CEO of sister hedge fund Alameda Research.
Allison was the star witness in the Bankman-Fried prosecution and was recently sentenced to two years in prison.
Singer, a former engineering director at FTX, pleaded guilty early last year to six criminal charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws.
On Wednesday, Singh issued a statement to the court and whispered that he had strayed from his values and did not expect forgiveness. He said assisting the government investigation gave him purpose. Just before the hearing began, Singer paced alone in the elevator, rehearsing his statement on a page.
FTX fell into bankruptcy in November 2022 after the cryptocurrency exchange was unable to meet customer withdrawal requests and allegedly stole $8 billion in customer funds. In March, Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion.
Singer’s attorney, former Assistant U.S. Attorney for the Southern District of New York, Andrew Goldstein, said Singer became involved in FTX’s misconduct at a very late stage and cited his extensive cooperation with the government. Including testifying at Bankman-Fried’s trial last year.
Prosecutors noted that they met with Singer at least 24 times, lasting several hours, and that he showed “genuine remorse and desire to assist” and “brought the government’s attention to criminal conduct of which the government was unaware and, in some cases, “Without Singer’s cooperation, these cases may never have been discovered.” ”
Nicholas Roos, one of the prosecutors involved in the trial, noted that the government was “completely unaware” of the campaign financing scheme and that Singer “exclusively” provided details of the arrangement to the government.
Bankman-Fried was originally accused of using stolen client funds to contribute $100 million to the campaign ahead of the 2022 midterm elections.
Ruth told Judge Kaplan that leniency “will send an important message.”
As Kaplan read the sentence, he told the defendant: “You did the right thing.”
More than 30 of Singer’s friends and family members filled the courtroom seats on the 21st floor of the Manhattan courthouse. He was joined in the front row by his fiancée, parents and brother.
More than 100 people submitted letters on Singer’s behalf, including one from Bankman-Fried’s brother, Gabe, who called Singer “one of the kindest people he knew.” He asked Judge Kaplan to show Singer “the same compassion he has shown others throughout his life.”
John Ray, who took over as FTX CEO after filing for bankruptcy in 2022, also submitted a letter on Singer’s behalf, saying he provided valuable assistance and cooperation to the debtor throughout the bankruptcy proceedings. Ray said Singer produced extensive documentation and voluntarily returned Bahamas real estate purchased with FTX funds.
Another former top lieutenant to Bankman Fried, Ryan Salame, was sentenced in May to seven and a half years in prison. FTX co-founder and former technical lead Gary Wang will be sentenced on November 20.
— CNBC’s Dan Mangan contributed to this report.
watch: Caroline Ellison sentenced to two years in prison for role in FTX collapse
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