SEC Charges Former FTX Executive Nishad Singh with Investor Fraud
Nishad Singh, a former director of engineering at FTX, has been accused by the Securities and Exchange Commission (SEC) of playing an “active participant” role in a fraudulent scheme to deceive investors of FTX. The SEC alleges that Singh withdrew $6 million from FTX for personal use. While Singh has agreed to a “bifurcated settlement,” the SEC’s charges against him for investor fraud still stand.
SEC Charges Singh With Several Counts of Fraud
According to the Securities and Exchange Commission (SEC), Nishad Singh, a former director of engineering at FTX, has been charged with being an “active participant” in a fraudulent scheme to deceive investors on the crypto exchange.
The SEC has alleged that Singh went as far as withdrawing millions of dollars from FTX for his personal use. In a statement issued on Tuesday, the SEC charged Singh for his role in the “multiyear scheme” to defraud investors on FTX, which filed for bankruptcy protection in November. The former CEO of FTX, Sam Bankman-Fried, is also facing criminal and civil charges in connection with the alleged fraudulent scheme.
The SEC has accused Nishad Singh of being an “active participant” in a fraudulent plan to deceive investors on FTX, and has alleged that Singh withdrew approximately $6 million from FTX for his personal use. According to the SEC statement, Singh used the money for purchases including a “multi-million dollar house and donations to charitable causes.”
Although Singh has agreed to a “bifurcated settlement” with regards to the SEC charges, which is pending court approval, he reportedly pleaded guilty earlier on Tuesday to separate criminal charges filed by federal prosecutors.
Singh Faces More Trouble With Other Regulatory Bodies
In addition to the charges brought by the SEC, Nishad Singh has also been charged by the Commodity Futures Trading Commission (CFTC) with fraud by misappropriation. Singh did not challenge the CFTC’s allegations, and as per the statement from the commodities regulator, he has agreed to the proposed consent order of judgment.
According to the SEC, Nishad Singh developed software code that facilitated the transfer of FTX customer funds to Alameda Research, a crypto hedge fund co-founded by Sam Bankman-Fried and Gary Wang.
The SEC alleges that this was done despite Bankman-Fried’s false assurances to investors that FTX was a secure crypto asset trading platform with advanced risk mitigation measures in place to safeguard customer assets, and that Alameda was just like any other customer with no special privileges. The SEC’s statement goes on to say that Singh was aware or should have been aware that these statements were deceptive.
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