In a recent news update on the ongoing court trial of the former chief executive officer of the collapsed FTX exchange, Sam Bankman-Fried, another top executive of the firm, had mounted the witness stand to testify to the internal illegal activities of the firm and how about $8 billion customers funds disappeared before FTX collapsed while pleading guilty to the charges against him.
According to the report, Nisha Singh, the former chief of the engineering department at FTX, has relayed his knowledge about the missing $8 billion of customers’ money, which was reportedly missing from the FTX platform to the court as a witness during the third week of SBF’s criminal trial.
In his testimony, the FTX executive stated that the crypto exchange was misappropriating users’ money about two months before the company filed for Chapter 11 bankruptcy in November last year. He added that in September 2022, he became aware of a hole in the exchange’s finances.
Singh Testifies Against SBF
He added that he noticed about $8 billion missing from FTX’s account, and he was left with no choice but to approve several transactions that he knew were executed with customers’ funds.
Furthermore, Singh claimed that Bankman-Fried told him at the time that the missing customers’ money was used to fund different expenditures like venture investments, real estate acquisition, and political donations by SBF’s affiliated trading company, Alameda Research. Referencing Singh’s testimony, the prosecution team plans to hold Sam Bankman-Fried responsible for calling the shots at both FTX and Alameda Firms.
In addition, Singh reported that the FTX CEO was fond of ruling out objections and suggestions from the rest of the administration, making huge investments aimed at giving him and his business an easy passageway with politicians and celebrities in the US. Also, the chief engineer addressed the question about the $200 million investment Alameda made with K5 Global.
SBF Invested Clients’ Funds In Kives’ Business
According to him, Sam Bankman-Fried attended a Super Bowl party hosted by a prominent businessman, Micheal Kives, and in attendance also were important dignitaries like Kendall Jenner, Hillary Clinton, and Jeff Bezos, among others. Ingrained by the event, SBF reportedly invested a whopping $200 million into the Kives’ business with the aim of making essential connections for FTX.
Singh testified that he raised an observation during board meetings at the time that the investment that SBF was promising to create a network between FTX and celebrities and professional athletes could be toxic for the culture of the firm and value extractive. He added that he told SBF that if he must make the investment, he should avoid using FTX funds and instead use his funds.
However, his advice fell on deaf ears as the Prosecutors confirmed from the FTX and Alameda investment spreadsheet that the investment worth $200,000 in K5 business went through. Also, they discovered that it was funded from Alameda Research’s account and not SBF’s account.
Customer Claimed To Lose $270,000 In FTX Fall
Nisha Singh, just like other top FTX executives like Gary Wang and Carolime Ellison, had testified against his former employer and friend while pleading guilty to the fraud charges the prosecutors charged against them for their involvement in misappropriating customers’ funds which led to the crypto exchange’s insolvency.
Prior to Singh’s testament, a former FTX client, Tareq Morad, claimed that he came across FTX exchanges via headlines and decided to find his account on the platform. When the firm collapsed, he added that he lost about $270,000 in personal funds. Singh commented that often, SBF unilaterally withdrew an excessive amount from the customers’ money till the firm collapsed.
The testimony added that he constantly protested against the executives’ lavish spending of customers’ funds; however, he said SBF berated him for raising unnecessary concerns, claiming that he was one of the protagonists who spread doubts concerning the company to others.
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